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									 BP p.l.c.
 Group results
 First quarter 2011


                                                                                                              London 27 April 2011
                                                        FOR IMMEDIATE RELEASE



                                                                                                    First         Fourth            First
                                                                                                  quarter        quarter          quarter
                                                                                                    2011            2010            2010
$ million
Profit for the period(a)                                                                             7,124         5,567            6,079
Inventory holding (gains) losses, net of tax                                                        (1,643)         (953)            (481)
Replacement cost profit                                                                              5,481         4,614            5,598

–     per ordinary share (cents)                                                                     29.13         24.55            29.82
–     per ADS (dollars)                                                                               1.75          1.47             1.79

 BP’s first-quarter replacement cost profit was $5,481 million, compared with $5,598 million a year ago.

 The group income statement for the first quarter reflects a pre-tax charge of $0.4 billion related to the Gulf of Mexico oil
    spill. All charges relating to the incident have been treated as non-operating items. For further information on the Gulf of
    Mexico oil spill and its consequences see pages 2 – 3, Note 2 on pages 21 – 26 and Legal proceedings on pages 31 – 37.

 Non-operating items (including amounts relating to the Gulf of Mexico oil spill) and fair value accounting effects for the first
    quarter, on a post-tax basis, had a net favourable impact of $107 million compared with a net unfavourable impact of
    $49 million in the first quarter of 2010. See pages 4, 18 and 19 for further details.

 Finance costs and net finance income or expense relating to pensions and other post-retirement benefits were $239 million
    for the first quarter, compared with $228 million for the same period last year.

 The effective tax rate on replacement cost profit for the first quarter was 37% compared with 34% a year ago. For the full
    year, our expectation is that the effective tax rate will be around 32-34%, in line with previous guidance. Excluding the
    impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary
    charge on UK oil and gas production, the effective tax rate for the first quarter was 30%. The UK government has also
    announced its intention to restrict the tax relief available on decommissioning expenditure to 50% in 2012. This change is
    not yet substantively enacted but would be likely to give rise to an additional tax charge in 2012 in the order of $0.4 billion.

 Including the impact of the Gulf of Mexico oil spill, net cash provided by operating activities for the first quarter was
    $2.4 billion, compared with $7.7 billion in the same period of last year. The amounts for the first quarter of 2011 included a
    net cash outflow of $2.8 billion relating to the Gulf of Mexico oil spill and also included the impact of increases in working
    capital as a consequence of higher oil prices.

 Net debt at the end of the quarter was $27.5 billion, compared with $25.2 billion a year ago. The ratio of net debt to net
    debt plus equity was 21% compared with 19% a year ago.

 Total capital expenditure for the first quarter was $4.0 billion, all of which was organic(b). Disposal proceeds were $1.0
    billion for the quarter.

 The quarterly dividend expected to be paid on 28 June 2011 is 7 cents per share ($0.42 per ADS). The corresponding
    amount in sterling will be announced on 14 June 2011. A scrip dividend alternative is available, allowing shareholders to
    elect to receive their dividend in the form of new ordinary shares and ADS holders in the form of new ADSs. Details of the
    scrip dividend programme are available at www.bp.com/scrip.

 On 14 April, BP announced that, as a result of the continuing interim injunction prohibiting completion, it had agreed with
    Rosneft to extend the deadline for completing their previously announced share swap agreement until 16 May 2011. This is
    to allow more time for the arbitration process that was convened to resolve issues raised by Alfa Petroleum Holdings
    Limited and OGIP Ventures Limited and to determine whether or not the interim injunction prohibiting completion should
    remain in effect. See Legal proceedings on page 37 for further information.


    (a)   Profit attributable to BP shareholders.
    (b)   Organic capital expenditure excludes acquisitions and asset exchanges (see page 16).

The commentaries above and following are based on replacement cost profit and should be read in conjunction with the cautionary
statement on page 11.


                                                                                                                                        1
                                                 Gulf of Mexico oil spill

Operational update

During the first quarter of 2011, the majority of the subsea work related to the Gulf of Mexico oil spill was completed. This
included the plugging and abandonment (P&A) of the second relief well on 8 March 2011. The last source control vessel, the
Discoverer Enterprise, is in the final stages of being cleaned and decontaminated and this is expected to be completed by the
end of the second quarter of 2011. Seabed survey work commenced on 21 March 2011 and is expected to take 40 to 60
days, after which a seismic survey is expected to commence with planned completion in the third quarter of 2011.

The majority of the shoreline clean-up phase of the incident was completed in the first quarter of 2011. Limited work
continues to complete cleaning of the impacted marshes and barrier islands. Monitoring and maintenance continues on
shorelines where clean-up has been completed. Efforts continue to identify and, where practicable to do so safely and
effectively, to remove submerged oil mats offshore. Finally, a pilot project to determine the feasibility of recovering the
remaining anchors that were used to secure protective boom in the shallow coastal waters of Louisiana is nearing
completion.

The phased transition from the Gulf Coast incident management team (GC-IMT) to BP’s Gulf Coast Restoration Organization
(GCRO) continues, and the response organization continues to maintain resources in line with operational requirements.
GCRO state offices have been established in the four impacted Gulf States (Alabama, Florida, Louisiana and Mississippi) and
these manage the ongoing activities including any shoreline monitoring and maintenance work and projects. Surveys are
scheduled for the fourth quarter of 2011, after the hurricane season, to identify any remaining clean-up needs.

Trust and claims update

On 15 February 2011, BP made a scheduled $1.25 billion contribution to the Deepwater Horizon Oil Spill Trust fund,
established in 2010 to satisfy legitimate individual and business claims administered by the Gulf Coast Claims Facility (GCCF),
state and local government claims resolved by BP, final judgments and settlements, state and local response costs, and
natural resource damages (NRD) and related costs. Payments from the Trust during the quarter totalled $1.1 billion, of which
$934 million was paid through the GCCF to individual and business claimants, $12 million in relation to state and local
government claims, and $116 million for NRD costs and other resolved items.

On 23 November 2010, the GCCF ended its Emergency Advance Payment process. During the emergency advance phase,
the GCCF received claims from 448,970 claimants and paid 169,005 claimants amounts totalling $2.6 billion. Following a
transition period, the GCCF began the second and final phase of the claims process(a). In connection with this second phase,
claimants submitting legitimate claims to the GCCF may elect to (i) receive interim payments for substantiated past losses, or
(ii) receive an offer for full and final settlement payment and release, with certain exceptions, their right to sue all potentially
liable entities including BP. As at 31 March 2011, 267,960 claimants had submitted a claim as part of the second phase, of
which 107,955 had been paid and finalized for $1 billion and 4,343 had been denied. The remaining 155,662 claimants are at
various stages of the GCCF’s claims review process.

BP received 100 new government claims during the first quarter and has now processed 84% of all government claims filed
since the incident occurred, for which BP has made payments totalling $559 million. The remaining government claims are
going through the claims process. These amounts do not include payments to the US Coast Guard for federal government
expenses (which include the expenses of a number of federal entities) and agencies from four states.

Restoration, research and other donations

As part of the Natural Resource Damage Assessment and Restoration (NRDA) process, trustees held a series of public
meetings along the Gulf Coast. The first NRDA emergency restoration project was initiated in January 2011 to reduce further
injury to migratory birds by creating an additional wintering habitat in the region. Additional emergency restoration projects to
address shoreline and aquatic vegetation impacts are in the planning phase, with a project to protect sea turtle eggs and
hatchlings expected to begin in the second quarter of 2011.

In January the National Fish and Wildlife Foundation (NFWF) reported that several emergency projects implemented by NFWF
using BP funds achieved substantial benefits for wildlife during a six-month period. BP donated $22 million to the NFWF from
the net revenue it received from the sale of oil recovered from the spill.

On 11 February, the Unified Command issued the results of the second part of its Operational Science Advisory Team (OSAT
II) study. The report found that environmental impacts of remnant oil found on or near beaches after clean-up operations were
relatively minor, and that further cleaning would likely do more harm than good to the ecosystem. The final determination that
no further treatment activity is required at a given site will be made in agreement with federal, state and local authorities.

In March, BP completed an agreement with the state of Alabama to provide $16 million for tourism promotion. In April, BP
completed a similar agreement with the state of Florida for $30 million and an agreement has been reached with the state of
Mississippi for $16 million. Discussions are currently under way with the states of both Mississippi and Alabama regarding
contributions for seafood testing and marketing.

   (a)   As reported at 31 December 2010, the total number of claimants who had filed a claim with the GCCF stood at 468,869, which
         included claimants under both the emergency advance phase and the second phase.

                                                                                                                                      2
                                   Gulf of Mexico oil spill (continued)

The Master Research Agreement between BP and the Gulf of Mexico Alliance for the Gulf of Mexico Research Initiative (GRI)
was signed on 14 March 2011. On 25 April 2011, the independent GRI Research Board issued a request for proposals (RFP)
for studies into the effects of the Deepwater Horizon incident and the potential associated impact on the environment and
public health. The Research Board anticipates awarding the first funds under the RFPs in the summer of 2011.

As of 19 April 2011, all of the US federal commercial waters in the Gulf of Mexico are now open for fishing, including those
immediately surrounding the Deepwater Horizon wellhead.

On 21 April 2011, BP entered into a framework agreement with the natural resource trustees for the United States and five
Gulf coast states, providing for up to $1 billion to be spent on early restoration projects to address natural resource injuries
resulting from the Gulf of Mexico oil spill. Funding for these projects will come from the $20-billion Deepwater Horizon Oil Spill
Trust. BP will work with the trustees of the Deepwater Horizon Oil Spill Trust to segregate funds to be made available to pay
for early restoration projects and other NRD claims. This agreement has no impact on BP's first-quarter profit as the full
amount of the trust fund has been previously expensed. Each project that is selected for early restoration pursuant to the
framework agreement must be agreed to by BP and all natural resource trustees. Each project agreement will identify the
natural resource improvements that the parties expect to achieve with the project, and those improvements will offset BP’s
alleged liability for natural resource damages in settlement agreements or final court judgements. The parties seek to begin
early restoration under this agreement in 2011 and 2012.

Financial update

The income statement for the first quarter included a pre-tax charge of $0.4 billion in relation to the incident, reflecting an
increase in the oil spill response provision and functional expenses of the GCRO. This is in addition to the pre-tax charge of
$40.9 billion recognized in 2010 which included the $20-billion trust commitment.

The total amounts that will be paid by BP in relation to all obligations relating to the incident are subject to significant
uncertainty as described further in Note 2 on pages 21 – 26 and in BP’s Annual Report and Form 20-F 2010. Also see Note 2,
on page 25 under Contingent assets, for information on partner recovery.

Legal proceedings and investigations

See Gulf of Mexico oil spill on pages 34 – 39 of BP’s Annual Report and Form 20–F 2010 and Legal proceedings on pages
31 – 37 herein for details of legal proceedings, including external investigations relating to the incident.




                                                                                                                                  3
            Analysis of replacement cost profit before interest and tax and
                          reconciliation to profit for the period

                                                                                                            First          Fourth           First
                                                                                                          quarter         quarter         quarter
                                                                                                            2011             2010           2010
$ million
Exploration and Production                                                                                   8,420           8,000           8,292
Refining and Marketing                                                                                       2,079             964             729
Other businesses and corporate                                                                                (478)           (550)           (328)
Gulf of Mexico oil spill response(a)                                                                          (384)         (1,010)                 –
Consolidation adjustment                                                                                      (542)             56             208
RC profit before interest and tax(b)                                                                         9,095           7,460           8,901


Finance costs and net finance income or expense relating to
 pensions and other post-retirement benefits                                                                  (239)           (346)           (228)
Taxation on a replacement cost basis                                                                        (3,314)         (2,404)         (2,966)
Minority interest                                                                                              (61)             (96)          (109)
Replacement cost profit attributable to BP shareholders                                                      5,481           4,614           5,598


Inventory holding gains (losses)                                                                             2,412           1,445             705
Taxation (charge) credit on inventory holding gains and losses                                                (769)           (492)           (224)
Profit for the period attributable to BP shareholders                                                        7,124           5,567           6,079

  (a)   See Note 2 on pages 21 – 26 for further information on the accounting for the Gulf of Mexico oil spill response.
  (b)   Replacement cost profit reflects the replacement cost of supplies. For further information see page 17.



           Total of non-operating items and fair value accounting effects(a)(b)

                                                                                                            First          Fourth           First
                                                                                                          quarter         quarter         quarter
                                                                                                            2011             2010           2010
$ million
Exploration and Production                                                                                     739           1,344             104
Refining and Marketing                                                                                        (117)            220             (60)
Other businesses and corporate                                                                                (181)             (67)          (118)
Gulf of Mexico oil spill response                                                                             (384)         (1,010)                 –
Total before interest and taxation                                                                              57             487             (74)
Finance costs(c)                                                                                               (16)             (30)                –
Total before taxation                                                                                           41             457             (74)
Taxation credit (charge)(d)                                                                                     66            (207)             25
Total after taxation for the period                                                                            107             250             (49)

  (a)   An analysis of non-operating items by type is provided on page 18 and an analysis by region is shown on pages 7, 9 and 10.
  (b)   Information on fair value accounting effects is non-GAAP. For further details, see page 19.
  (c)   Finance costs relate to the Gulf of Mexico oil spill. See Note 2 on pages 21 – 26 for further details.
  (d)   Tax is calculated using the quarter’s effective tax rate (excluding the impact of the Gulf of Mexico oil spill and, for the first quarter
        2011, the impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary
        charge on UK oil and gas production) on replacement cost profit or loss. However, the US statutory tax rate has been used for
        expenditures relating to the Gulf of Mexico oil spill that qualify for tax relief.




                                                                                                                                                    4
                                                       Per share amounts

                                                                                              First        Fourth         First
                                                                                            quarter       quarter       quarter
                                                                                              2011           2010         2010
Per ordinary share (cents)(a)
Profit for the period                                                                          37.86         29.62         32.39
RC profit for the period                                                                       29.13         24.55         29.82

Per ADS (dollars)(a)
Profit for the period                                                                           2.27          1.78          1.94
RC profit for the period                                                                        1.75          1.47          1.79

   (a)   See Note 6 on page 28 for details of the calculation of earnings per share.



                                Net debt ratio – net debt: net debt + equity

                                                                                              First        Fourth         First
                                                                                            quarter       quarter       quarter
                                                                                              2011           2010         2010
$ million
Gross debt                                                                                    47,102       45,336        32,153
Less: fair value asset of hedges related to finance debt                                         870          916           152
                                                                                              46,232       44,420        32,001
Cash and cash equivalents                                                                     18,726       18,556         6,841
Net debt                                                                                      27,506       25,864        25,160
Equity                                                                                      103,183        95,891       104,978
Net debt ratio                                                                                 21%           21%           19%

See Note 7 on page 29 for further details on finance debt.

Net debt and net debt ratio are non-GAAP measures. Net debt includes the fair value of associated derivative financial
instruments that are used to hedge foreign exchange and interest rate risks relating to finance debt, for which hedge
accounting is claimed. The derivatives are reported on the balance sheet within the headings ‘Derivative financial
instruments’. We believe that net debt and net debt ratio provide useful information to investors. Net debt enables investors
to see the economic effect of gross debt, related hedges and cash and cash equivalents in total. The net debt ratio enables
investors to see how significant net debt is relative to equity from shareholders.



                                                                Dividends

Dividends payable

BP today announced a dividend of 7 cents per ordinary share expected to be paid in June. The corresponding amount in
sterling will be announced on 14 June 2011, calculated based on the average of the market exchange rates for the four
dealing days commencing on 8 June 2011. Holders of American Depositary Shares (ADSs) will receive $0.42 per ADS. The
dividend is payable on 28 June 2011 to shareholders and ADS holders on the register on 13 May 2011. A scrip dividend
alternative is available, allowing shareholders to elect to receive their dividend in the form of new ordinary shares and ADS
holders in the form of new ADSs. Details of the scrip dividend programme including the first-quarter dividend and timetable
are available at www.bp.com/scrip.

Dividends paid                                                                                First        Fourth         First
                                                                                            quarter       quarter       quarter
                                                                                              2011           2010         2010
Dividends paid per ordinary share
 cents                                                                                         7.000             –       14.000
 pence                                                                                        4.3372             –        8.679
Dividends paid per ADS (cents)                                                                 42.00             –        84.00

In the first quarter 2011, the total dividend paid in cash amounted to $808 million. In addition, 66.6 million new shares were
issued to shareholders who had elected to receive their dividends in the form of new shares, rather than cash, through the
scrip dividend programme, for a value of $510 million.


                                                                                                                                 5
                                         Exploration and Production

                                                                                               First        Fourth         First
                                                                                             quarter       quarter       quarter
                                                                                               2011           2010         2010
$ million
Profit before interest and tax                                                                 8,535         8,114         8,316
Inventory holding (gains) losses                                                                (115)         (114)          (24)
Replacement cost profit before interest and tax                                                8,420         8,000         8,292
By region
US                                                                                             1,875         1,522         2,762
Non-US                                                                                         6,545         6,478         5,530
                                                                                               8,420         8,000         8,292

The replacement cost profit before interest and tax for the first quarter was $8,420 million, compared with $8,292 million for
the same period in 2010. The first quarter of 2011 benefited from net non-operating gains of $710 million, primarily gains on
disposals arising from the ongoing asset disposal programme, partly offset by losses on embedded derivatives. A year ago,
there were net non-operating gains of $41 million. Fair value accounting effects in the first quarter had a favourable impact of
$29 million, compared with a favourable impact of $63 million in the same period a year ago.

The primary additional factors impacting the first-quarter result, compared with the same period last year, were lower
production volumes (including from the impact of divestments), higher costs (including rig standby costs in the Gulf of
Mexico), higher exploration write-offs and a lower contribution from gas marketing and trading. These factors were partly
offset by higher realizations and lower depreciation.

Production for the quarter was 3,578mboe/d, 11% lower than the first quarter 2010. After adjusting for the effect of
acquisitions and divestments, and entitlement impacts in our production-sharing agreements (PSAs), the decrease was 7%.
The reduction was weighted toward our highest margin areas and primarily reflects the impacts to the Gulf of Mexico
production as a result of the drilling moratorium, higher turnaround and maintenance activity in the North Sea and in Angola,
and the Trans-Alaska Pipeline System interruption, partly offset by first production from Iraq.

Looking ahead, we expect second-quarter production to reflect the continued impact on operations in the Gulf of Mexico
following the drilling moratorium, the impact of acquisitions and divestments, and the seasonal ramp-up in turnaround activity,
which is expected to be higher than in 2010.

BP has neither production nor reserves in Libya. We have suspended our exploration operations (seismic and preparation for
drilling) that were under way. We will fully comply with sanctions (US, UK, EU, UN), and will continue to examine them in
detail to ensure our compliance. See Further note on certain activities on page 11 for further information on Libya sanctions.

We continued to make strategic progress in the quarter. In Australia, we were awarded four deepwater offshore blocks in the
Ceduna Sub Basin, off the coast of South Australia. The proposed exploration activity is expected to be phased over six years
and, as part of the regulatory approval process, will be subject to detailed environmental assessment.

In Iraq, the Rumaila Operating Organization met a major milestone in December 2010 in the redevelopment of the Rumaila
field in Southern Iraq by increasing production by more than 10% above the initial production rate agreed in December 2009.
Meeting this production target is a significant milestone and triggers the recognition of production and earnings. We expect to
commence liftings in the second quarter.

In February 2011, Reliance Industries Limited (Reliance) and BP announced an alliance across the full value chain with BP
taking a 30% stake in 23 oil and gas PSAs operated by Reliance in India, including the producing KG D6 block, and the
formation of a 50:50 joint venture between the two companies for the sourcing and marketing of gas in India. The joint
venture will also endeavour to accelerate the creation of infrastructure for receiving, transporting and marketing of natural gas
in India. BP will pay Reliance an aggregate consideration of $7.2 billion, subject to completion adjustments. Future
performance payments of up to $1.8 billion could be payable based on exploration success that results in the development of
commercial discoveries. The completion of this transaction remains subject to Indian regulatory approvals. Completion is
expected to take place in the second quarter of 2011.

BP announced in February the intention of selling its interests in a number of operated oil and gas fields in the UK. The assets
involved are the Wytch Farm onshore oilfield in Dorset and all of BP’s operated gas fields in the southern North Sea, including
associated pipeline infrastructure and the Dimlington terminal. For an update on previously announced disposals, see Note 3
on page 26.

BP confirmed in early April that it has been awarded interests in four new coalbed methane PSAs in the Barito basin of South
Kalimantan, Indonesia.

For information on the status of our proposed share swap with Rosneft, see Legal proceedings on page 37.




                                                                                                                                   6
                                             Exploration and Production

                                                                                                        First         Fourth          First
                                                                                                      quarter        quarter        quarter
                                                                                                        2011            2010          2010
$ million
Non-operating items
US                                                                                                           4           (273)          (62)
Non-US                                                                                                     706          1,629          103
                                                                                                           710          1,356           41
Fair value accounting effects(a)
US                                                                                                          25              9           81
Non-US                                                                                                       4            (21)          (18)
                                                                                                            29            (12)          63
Exploration expense
US(b)                                                                                                      308            254           69
Non-US(c)                                                                                                   91            177           51
                                                                                                           399            431          120
Production (net of royalties)(d)
Liquids (mb/d)(e)
US                                                                                                         523            567          665
Europe                                                                                                     166            155          215
Russia                                                                                                     856            858          849
Rest of World                                                                                              725            686          798
                                                                                                        2,270           2,266         2,527
Natural gas (mmcf/d)
US                                                                                                      1,905           2,085         2,221
Europe                                                                                                     373            390          599
Russia                                                                                                     719            698          673
Rest of World                                                                                           4,589           4,987         5,107
                                                                                                        7,586           8,160         8,600
Total hydrocarbons (mboe/d)(f)
US                                                                                                         851            927         1,048
Europe                                                                                                     230            222          318
Russia                                                                                                     980            978          965
Rest of World                                                                                           1,517           1,546         1,679
                                                                                                        3,578           3,673         4,010
Average realizations(g)
Total liquids ($/bbl)                                                                                   93.93           78.80         71.86
Natural gas ($/mcf)                                                                                       4.21           3.98          4.26
Total hydrocarbons ($/boe)                                                                              59.02           50.41         49.16

   (a)   These effects represent the favourable (unfavourable) impact relative to management’s measure of performance. Further
         information on fair value accounting effects is provided on page 19.
   (b)   First quarter 2011 includes $93 million and fourth quarter 2010 includes $157 million related to decommissioning of idle
         infrastructure, as required by BOEMRE’s Notice to Lessees No. 2010-GO5 issued in October 2010.
   (c)   First quarter 2011 includes $44 million classified within the ‘other’ category of non-operating items.
   (d)   Includes BP’s share of production of equity-accounted entities.
   (e)   Crude oil and natural gas liquids.
   (f)   Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels.
   (g)   Based on sales of consolidated subsidiaries only – this excludes equity-accounted entities.

Because of rounding, some totals may not agree exactly with the sum of their component parts.




                                                                                                                                          7
                                            Refining and Marketing

                                                                                              First        Fourth         First
                                                                                            quarter       quarter       quarter
                                                                                              2011           2010         2010
$ million
Profit before interest and tax                                                                4,367         2,282         1,408
Inventory holding (gains) losses                                                              (2,288)       (1,318)          (679)
Replacement cost profit before interest and tax                                               2,079           964            729

By region
US                                                                                              640            21              (63)
Non-US                                                                                        1,439           943            792
                                                                                              2,079           964            729

The replacement cost profit before interest and tax for the first quarter was $2,079 million, compared with $729 million for
the same period last year.

The first quarter‘s result included a net non-operating charge of $17 million compared with a net charge of $70 million a year
ago. Fair value accounting effects had an unfavourable impact of $100 million for the first quarter compared with a favourable
impact of $10 million a year ago.

The result for the first quarter reflected continued strong operations in all businesses. Compared with the same period last
year, the result reflected a very strong supply and trading contribution and an improved overall refining environment. In
addition there was strong refining feedstock optimization in the US, due to BP’s location advantage in accessing WTI-priced
crude grades, and strength in petrochemicals’ aromatics margins and volumes. These factors were partially offset by the
impacts of higher turnaround activities compared with the same period last year.

In the fuels value chains, Solomon refining availability (as defined in footnote (b) on page 9) was 93.9% for the quarter but
refining throughputs in the first quarter were slightly lower compared with the same period last year, primarily due to higher
turnaround activities at the Texas City refinery.

In the international businesses, strong operational performance in our petrochemicals business has enabled us to benefit
from the favourable margin environment and lubricants continued to deliver earnings growth.

Looking ahead, we expect the supply and trading contribution in the second quarter to be lower than the very strong first-
quarter performance. In the fuels value chains, WTI differentials may narrow somewhat compared with recent levels,
reducing the benefit to our US Midwest refineries. We expect the usual seasonal improvement in refining margins in the
second quarter but anticipate some softening in petrochemicals margins. Turnaround activities in the second quarter are
expected to be in line with the first quarter.

In March, BP announced that it had agreed to sell a package of 33 refined products terminals and 992 miles of pipelines
across 13 states in the US. The transaction is expected to complete during the second quarter of 2011.




                                                                                                                                 8
                                                  Refining and Marketing

                                                                                                           First          Fourth          First
                                                                                                         quarter         quarter        quarter
                                                                                                           2011             2010          2010
$ million
Non-operating items
US                                                                                                            (16)            (12)             (3)
Non-US                                                                                                         (1)             98             (67)
                                                                                                              (17)             86             (70)

Fair value accounting effects(a)
US                                                                                                            (48)            27               16
Non-US                                                                                                        (52)           107               (6)
                                                                                                             (100)           134               10

Refinery throughputs (mb/d)
US                                                                                                          1,194          1,343           1,366
Europe                                                                                                        768            777             780
Rest of World                                                                                                 307            300             282
Total throughput                                                                                            2,269          2,420           2,428
Refining availability (%)(b)                                                                                 93.9            94.9           95.3

Sales volumes (mb/d)(c)
Marketing sales by region
US                                                                                                          1,375          1,415           1,418
Europe                                                                                                      1,267          1,379           1,428
Rest of World                                                                                                 610            597             629
Total marketing sales                                                                                       3,252          3,391           3,475
Trading/supply sales                                                                                        2,256          2,485           2,622
Total refined product sales                                                                                 5,508          5,876           6,097

Refining Marker Margin (RMM) ($/bbl)(d)
US West Coast                                                                                               16.18          12.52            9.82
US Gulf Coast                                                                                               10.81           9.21           10.31
US Midwest                                                                                                   3.55           5.00            4.99
North West Europe                                                                                           11.07          11.29            9.79
Mediterranean                                                                                                9.09           9.80            8.27
Singapore                                                                                                   14.69          11.56           10.60
BP Average RMM                                                                                              11.02           9.98            9.06

Chemicals production (kte)
US                                                                                                          1,135          1,046             940
Europe(e)                                                                                                     985            894           1,063
Rest of World                                                                                               1,918          1,780           1,888
Total production(e)                                                                                         4,038          3,720           3,891

  (a)   These effects represent the favourable (unfavourable) impact relative to management’s measure of performance. Further information
        on fair value accounting effects is provided on page 19.
  (b)   Refining availability represents Solomon Associates’ operational availability, which is defined as the percentage of the year that a unit
        is available for processing after subtracting the annualized time lost due to turnaround activity and all planned mechanical, process
        and regulatory maintenance downtime.
  (c)   Does not include volumes relating to crude oil.
  (d)   The Refining Marker Margin (RMM) replaces the Global Indicator Refining Margin (GIM), which we reported prior to 2011. The RMM
        is the average of regional indicator margins weighted for BP's crude refining capacity in each region. Each regional marker margin is
        based upon product yields and a marker crude oil deemed appropriate for the region. The regional marker margins may not be
        representative of the margins achieved by BP in any period because of BP’s particular refinery configurations and crude and product
        slate.
  (e)   A minor amendment has been made in the first quarter 2010.




                                                                                                                                                9
                                         Other businesses and corporate

                                                                                                        First          Fourth          First
                                                                                                      quarter         quarter        quarter
                                                                                                        2011             2010          2010
$ million
Profit (loss) before interest and tax                                                                     (469)          (537)           (326)
Inventory holding (gains) losses                                                                            (9)            (13)            (2)
Replacement cost profit (loss) before interest and tax                                                    (478)          (550)           (328)

By region
US                                                                                                        (188)          (225)           (231)
Non-US                                                                                                    (290)          (325)             (97)
                                                                                                          (478)          (550)           (328)
Results include
Non-operating items
US                                                                                                           1             (54)          (106)
Non-US                                                                                                    (182)            (13)            (12)
                                                                                                          (181)            (67)          (118)

Other businesses and corporate comprises the Alternative Energy business, Shipping, the group's aluminium business,
Treasury (which includes interest income on the group's cash and cash equivalents), and corporate activities worldwide.

The replacement cost loss before interest and tax for the first quarter was $478 million, compared with a loss of $328 million
a year ago. The net non-operating charge for the first quarter was $181 million, compared with a net charge of $118 million a
year ago.

In our US wind business, construction commenced at the 150MW Sherbino 2 wind farm in Pecos County, Texas, wholly
owned by BP. BP’s net wind generation capacity(a) at the end of the first quarter was 774MW (1,362MW gross), compared
with 711MW (1,237MW gross) at the end of the same period a year ago.

In our biofuels business, on 11 March BP agreed to pay a total of approximately $680 million to acquire 83% of the shares of
Companhia Nacional de Açúcar e Álcool (CNAA), a Brazilian ethanol and sugar producer, and to refinance all of CNAA's
existing long-term debt. Regulatory approval for the transaction has been received and completion is expected to take place in
the second quarter of 2011.

On 4 April, BP announced that it had agreed the sale of its wholly-owned subsidiary, ARCO Aluminum Inc., to a consortium of
Japanese companies for cash consideration of $680 million (subject to closing adjustments). Subject to obtaining required
regulatory approvals, the parties expect to complete the transaction in the third quarter of 2011.

   (a)   Net wind capacity is the sum of the rated capacities of the assets/turbines that have entered into commercial operation, including
         BP’s share of equity-accounted entities. The gross data is the equivalent capacity on a gross-JV basis, which includes 100% of the
         capacity of equity-accounted entities where BP has partial ownership. Capacity figures include 32MW in the Netherlands managed
         by our Refining and Marketing segment.




                                                                                                                                              10
                                                  Cautionary statement

Cautionary statement regarding forward-looking statements: The discussion in this results announcement contains forward-looking
statements particularly those regarding the expected effective tax rate for 2011 and the impact in 2012 of an announced change in UK tax
relief available on decommissioning expenditure; the quarterly dividend payment; the completion of the decontamination of the vessels
involved in the response to the Gulf of Mexico oil spill; the timing of seabed and seismic surveys of the area affected by the Gulf of Mexico
oil spill; the magnitude and timing of remaining remediation costs related to the Gulf of Mexico oil spill; the factors that could affect the
magnitude of BP’s ultimate exposure and the cost to BP in relation to the spill and any potential mitigation resulting from BP’s partners or
others involved in the spill; the potential liabilities resulting from pending and future legal proceedings and potential investigations and
civil or criminal actions that US state and/or local governments could seek to take against BP as a result of the spill; the timing of claims
and litigation outcomes and of payment of legal costs; the anticipated timing for completion of the disposition of certain BP assets; the
anticipated timing of the acquisition of shares of CNAA; contributions to and payments from the trust fund and the setting aside of assets
while the fund is building; the expected impact on second-quarter production from lower production in the Gulf of Mexico following the
drilling moratorium, acquisitions and divestments, and seasonal ramp up in turnaround activity; expectations for second-quarter refining
margins and for the petrochemicals environment; expectations for refinery turnaround activities; the supply and trading contribution and
WTI differentials in the second quarter; compliance with sanctions in relation to Libya; exploration activity in four deepwater offshore
blocks off of Australia; expectations regarding the re-development of the Rumaila field in Southern Iraq; continuing requests for cost
reimbursement from the US Coast Guard and other governmental authorities; the timing for publication of investigation reports; the
impact of BP’s potential liabilities relating to the Gulf of Mexico oil spill on the group, including its business, results and financial
condition; and BP’s anticipated response to potential future claims against Alyeska and Atlantic Richfield; completion of the transactions
related to a partnership with Reliance; and completion of a share swap agreement entered into with Rosneft. By their nature, forward-
looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will or may occur in the
future. Actual results may differ from those expressed in such statements, depending on a variety of factors including the timing of bringing
new fields onstream; future levels of industry product supply; demand and pricing; OPEC quota restrictions; PSA effects; operational
problems; general economic conditions; political stability and economic growth in relevant areas of the world; changes in laws and
governmental regulations; regulatory or legal actions including the types of enforcement action pursued and the nature of remedies
sought; the impact on our reputation following the Gulf of Mexico oil spill; exchange rate fluctuations; development and use of new
technology; the success or otherwise of partnering; the actions of competitors, trading partners, creditors, rating agencies and others;
natural disasters and adverse weather conditions; changes in public expectations and other changes to business conditions; wars and acts
of terrorism or sabotage; and other factors discussed under “Risk factors” in our Annual Report and Form 20-F 2010 as filed with the US
Securities and Exchange Commission (SEC).



                                        Further note on certain activities

Prior to the conflict in Libya, BP was involved in exploration activities (seismic and preparation for drilling) in the onshore Ghadames and
offshore Sirt basins pursuant to a participation agreement and an exploration and production-sharing agreement with the Libyan
government and affiliated entities. These entities are subject to international sanctions. BP has suspended all operations in Libya and
declared force majeure under these agreements. BP also had supply, purchase and trading activities with Libyan entities and affiliated
parties. BP has issued force majeure notices on outstanding contractual obligations. BP has no production or reserves in Libya.




                                                                                                                                          11
                                               Group income statement

                                                                                                        First         Fourth           First
                                                                                                      quarter        quarter         quarter
                                                                                                        2011            2010           2010
$ million
Sales and other operating revenues (Note 4)                                                            85,329          79,703         73,071
Earnings from jointly controlled entities – after interest and tax                                         262            233            403
Earnings from associates – after interest and tax                                                        1,409          1,125            763
Interest and other income                                                                                  124            174            142
Gains on sale of businesses and fixed assets                                                             1,188          2,753              38
Total revenues and other income                                                                        88,312          83,988         74,417

Purchases                                                                                              61,721          58,339         51,641
Production and manufacturing expenses(a)(b)                                                              6,508          7,522          5,740
Production and similar taxes (Note 5)                                                                    1,831          1,524          1,276
Depreciation, depletion and amortization                                                                 2,835          2,634          2,996
Impairment and losses on sale of businesses and fixed assets                                                59          1,201            164
Exploration expense                                                                                        399            431            120
Distribution and administration expenses(b)                                                              2,907          3,409          3,020
Fair value (gain) loss on embedded derivatives                                                             545              23           (146)
Profit before interest and taxation                                                                    11,507           8,905          9,606
Finance costs                                                                                              308            359            238
Net finance income relating to pensions and
 other post-retirement benefits                                                                            (69)            (13)           (10)
Profit before taxation                                                                                 11,268           8,559          9,378
Taxation(a)                                                                                              4,083          2,896          3,190
Profit for the period                                                                                    7,185          5,663          6,188
Attributable to
 BP shareholders                                                                                         7,124          5,567          6,079
 Minority interest                                                                                          61              96           109
                                                                                                         7,185          5,663          6,188
Earnings per share – cents (Note 6)
Profit for the period attributable to BP shareholders
Basic                                                                                                    37.86          29.62          32.39
Diluted                                                                                                  37.42          29.28          31.99

  (a)   See Note 2 on pages 21 – 26 for further details of the impact of the Gulf of Mexico oil spill on the income statement line items.
  (b)   Cash costs for the first quarter of 2011 increased compared to the same period a year ago, consistent with the increase in
        production and manufacturing expenses plus distribution and administration expenses. Cash costs are a subset of these two line
        items in the income statement. They represent the substantial majority of the expenses in these line items but exclude associated
        non-operating items (including amounts relating to the Gulf of Mexico oil spill), and certain costs that are variable, primarily with
        volumes (such as freight costs). They are the principal operating and overhead costs that management considers to be most directly
        under their control although they include certain foreign exchange and commodity price effects.




                                                                                                                                           12
                          Group statement of comprehensive income

                                                                                           First      Fourth      First
                                                                                         quarter     quarter    quarter
                                                                                           2011         2010      2010
$ million
Profit for the period                                                                      7,185       5,663      6,188
Currency translation differences                                                            657          26        (526)
Exchange (gains) losses on translation of foreign operations transferred to gain
 or loss on sale of businesses and fixed assets                                              11          (48)         –
Actuarial gain (loss) relating to pensions and other post-retirement benefits                  –        (320)         –
Available-for-sale investments marked to market                                             266          65         (93)
Available-for-sale investments – recycled to the income statement                             (2)         (8)         –
Cash flow hedges marked to market                                                           118          20        (162)
Cash flow hedges – recycled to the income statement                                          (16)        16         (94)
Cash flow hedges – recycled to the balance sheet                                               2           8         13
Taxation                                                                                      (5)       121        (119)
Other comprehensive income (expense)                                                       1,031        (120)      (981)
Total comprehensive income                                                                 8,216       5,543      5,207
Attributable to
 BP shareholders                                                                           8,139       5,449      5,105
 Minority interest                                                                           77          94        102
                                                                                           8,216       5,543      5,207



                               Group statement of changes in equity

                                                                                             BP
                                                                                   shareholders’    Minority      Total
                                                                                         equity     interest     equity
$ million
At 1 January 2011                                                                        94,987         904      95,891

Total comprehensive income                                                                8,139          77       8,216
Dividends                                                                                  (808)          (6)      (814)
Share-based payments (net of tax)                                                          (110)           –       (110)
At 31 March 2011                                                                        102,208         975     103,183

                                                                                             BP
                                                                                   shareholders’    Minority      Total
                                                                                         equity     interest     equity
$ million
At 1 January 2010                                                                       101,613         500     102,113

Total comprehensive income                                                                5,105         102       5,207
Dividends                                                                                 (2,626)         (3)    (2,629)
Share-based payments (net of tax)                                                            (13)          –        (13)
Transactions involving minority interests                                                      –        300        300
At 31 March 2010                                                                        104,079         899     104,978




                                                                                                                     13
                                                Group balance sheet

                                                                                   31 March 31 December
                                                                                       2011        2010
$ million
Non-current assets
Property, plant and equipment                                                       111,476     110,163
Goodwill                                                                              8,764       8,598
Intangible assets                                                                    14,439      14,298
Investments in jointly controlled entities                                           12,604      12,286
Investments in associates                                                            14,727      13,335
Other investments                                                                     1,462       1,191
Fixed assets                                                                        163,472     159,871
Loans                                                                                   882         894
Other receivables                                                                     6,055       6,298
Derivative financial instruments                                                      4,309       4,210
Prepayments                                                                           1,544       1,432
Deferred tax assets                                                                     566         528
Defined benefit pension plan surpluses                                                2,430       2,176
                                                                                    179,258     175,409
Current assets
Loans                                                                                   254         247
Inventories                                                                          28,657      26,218
Trade and other receivables                                                          42,751      36,549
Derivative financial instruments                                                      4,741       4,356
Prepayments                                                                           4,291       1,574
Current tax receivable                                                                  234         693
Other investments                                                                     1,439       1,532
Cash and cash equivalents                                                            18,726      18,556
                                                                                    101,093      89,725
Assets classified as held for sale (Note 3)                                           6,241       7,128
                                                                                    107,334      96,853
Total assets                                                                        286,592     272,262
Current liabilities
Trade and other payables                                                             51,345      46,329
Derivative financial instruments                                                      4,309       3,856
Accruals                                                                              5,273       5,612
Finance debt                                                                         14,255      14,626
Current tax payable                                                                   3,490       2,920
Provisions                                                                            9,258       9,489
                                                                                     87,930      82,832
Liabilities directly associated with assets classified as held for sale (Note 3)      1,013       1,047
                                                                                     88,943      83,879
Non-current liabilities
Other payables                                                                       12,672      14,285
Derivative financial instruments                                                      4,054       3,677
Accruals                                                                                426         637
Finance debt                                                                         32,847      30,710
Deferred tax liabilities                                                             12,419      10,908
Provisions                                                                           22,254      22,418
Defined benefit pension plan and other post-retirement benefit plan deficits          9,794       9,857
                                                                                     94,466      92,492
Total liabilities                                                                   183,409     176,371
Net assets                                                                          103,183      95,891
Equity
BP shareholders’ equity                                                             102,208      94,987
Minority interest                                                                       975         904
                                                                                    103,183      95,891



                                                                                                     14
                                   Condensed group cash flow statement

                                                                                                         First          Fourth          First
                                                                                                       quarter         quarter        quarter
                                                                                                         2011             2010          2010
$ million
Operating activities
Profit before taxation                                                                                  11,268           8,559           9,378
Adjustments to reconcile profit before taxation to net cash
 provided by operating activities
 Depreciation, depletion and amortization and exploration
  expenditure written off                                                                                 3,127          2,877           3,017
 Impairment and (gain) loss on sale of businesses and fixed assets                                       (1,129)         (1,552)           126
 Earnings from equity-accounted entities, less dividends received                                        (1,446)            (76)          (669)
 Net charge for interest and other finance expense, less net
  interest paid                                                                                              51               5             46
 Share-based payments                                                                                      (124)             72           (146)
 Net operating charge for pensions and other post-retirement benefits,
  less contributions and benefit payments for unfunded plans                                               (439)           (298)          (490)
 Net charge for provisions, less payments                                                                   273          2,005              (48)
 Movements in inventories and other current and non-current
  assets and liabilities(a)                                                                              (7,823)       (10,215)         (1,940)
 Income taxes paid                                                                                       (1,354)         (1,555)        (1,581)
Net cash provided by (used in) operating activities                                                       2,404            (178)         7,693
Investing activities
Capital expenditure(b)                                                                                   (5,774)         (5,118)        (4,289)
Acquisitions, net of cash acquired                                                                            (2)             (8)                –
Investment in jointly controlled entities                                                                   (89)           (174)            (82)
Investment in associates                                                                                    (11)            (27)             (6)
Proceeds from disposal of fixed assets(c)                                                                   384          2,555             108
Proceeds from disposal of businesses, net of cash disposed(c)                                               586          4,818                   –
Proceeds from loan repayments                                                                                35            109              56
Net cash provided by (used in) investing activities                                                      (4,871)         2,155          (4,213)
Financing activities
Net issue (repurchase) of shares                                                                             12              31            128
Proceeds from long-term financing                                                                         4,917          6,529             342
Repayments of long-term financing                                                                        (2,622)         (1,963)        (2,495)
Net increase (decrease) in short-term debt                                                                  949            (533)          (247)
Dividends paid – BP shareholders                                                                           (808)              –         (2,626)
                  – Minority interest                                                                         (6)          (117)             (3)
Net cash provided by (used in) financing activities                                                       2,442          3,947          (4,901)
Currency translation differences relating to cash and
 cash equivalents                                                                                           195            (171)            (77)
Increase (decrease) in cash and cash equivalents                                                            170          5,753          (1,498)
Cash and cash equivalents at beginning of period                                                        18,556          12,803           8,339
Cash and cash equivalents at end of period                                                              18,726          18,556           6,841

   (a)   Includes:
         Inventory holding (gains) losses                                                                 (2,412)        (1,445)           (705)
         Fair value (gain) loss on embedded derivatives                                                      545             23            (146)
         Movements related to Gulf of Mexico oil spill response                                           (2,864)        (6,542)              –

         Inventory holding gains and losses and fair value gains and losses on embedded derivatives are also included within profit before
         taxation. See Note 2 for further information on the cash flow impacts of the Gulf of Mexico oil spill.
   (b)   First quarter 2011 included $2,000 million paid as a deposit relating to the transaction with Reliance Industries Limited.
         See page 6 for further information.
   (c)   Included in disposal proceeds are deposits received in respect of disposal transactions expected to complete in subsequent periods
         as follows: first quarter 2011 $57.5 million; fourth quarter 2010 $4,947 million; first quarter 2010 nil. For further information see
         Note 7.



                                                                                                                                             15
                                     Capital expenditure and acquisitions

                                                                                                          First          Fourth           First
                                                                                                        quarter         quarter         quarter
                                                                                                          2011             2010           2010
$ million
By business
Exploration and Production
US                                                                                                         1,023           1,043           1,133
Non-US(a)                                                                                                  2,111           2,319           2,815
                                                                                                           3,134           3,362           3,948
Refining and Marketing
US                                                                                                           522             755             528
Non-US                                                                                                       215             610             144
                                                                                                             737           1,365             672
Other businesses and corporate
US(b)                                                                                                        130             630                 28
Non-US                                                                                                         20            104                 39
                                                                                                             150             734                 67
                                                                                                           4,021           5,461           4,687
By geographical area
US(b)                                                                                                      1,675           2,428           1,689
Non-US(a)                                                                                                  2,346           3,033           2,998
                                                                                                           4,021           5,461           4,687
Included above:
Acquisitions and asset exchanges(a)(b)                                                                          9            212                  –

  (a)   First quarter 2010 included capital expenditure of $900 million relating to the formation of a partnership with Value Creation Inc. to
        develop the Terre de Grace oil sands acreage in the Athabasca region of Alberta, Canada.
  (b)   Fourth quarter 2010 included capital expenditure of $390 million for wind turbines, incurred at the time for future wind projects.



                                                         Exchange rates

                                                                                                          First          Fourth           First
                                                                                                        quarter         quarter         quarter
                                                                                                          2011             2010           2010
US dollar/sterling average rate for the period                                                              1.60            1.58            1.56
US dollar/sterling period-end rate                                                                          1.61            1.54            1.51
US dollar/euro average rate for the period                                                                  1.37            1.36            1.38
US dollar/euro period-end rate                                                                              1.41            1.33            1.34




                                                                                                                                                 16
            Analysis of replacement cost profit before interest and tax and
                        reconciliation to profit before taxation(a)

                                                                                                           First         Fourth           First
                                                                                                         quarter        quarter         quarter
                                                                                                           2011            2010           2010
$ million
By business
Exploration and Production
US                                                                                                         1,875           1,522          2,762
Non-US                                                                                                     6,545           6,478          5,530
                                                                                                           8,420           8,000          8,292
Refining and Marketing
US                                                                                                           640              21             (63)
Non-US                                                                                                     1,439             943             792
                                                                                                           2,079             964             729
Other businesses and corporate
US                                                                                                          (188)           (225)          (231)
Non-US                                                                                                      (290)           (325)            (97)
                                                                                                            (478)           (550)          (328)
                                                                                                          10,021           8,414          8,693
Gulf of Mexico oil spill response                                                                           (384)         (1,010)              –
Consolidation adjustment                                                                                    (542)             56            208
Replacement cost profit before interest and tax(b)                                                         9,095           7,460          8,901
Inventory holding gains (losses)(c)
Exploration and Production                                                                                   115             114             24
Refining and Marketing                                                                                     2,288           1,318            679
Other businesses and corporate                                                                                 9              13              2
Profit before interest and tax                                                                            11,507           8,905          9,606
Finance costs                                                                                                308             359            238
Net finance income relating to pensions
 and other post-retirement benefits                                                                          (69)            (13)           (10)
Profit before taxation                                                                                    11,268           8,559          9,378

Replacement cost profit before interest and tax
By geographical area
US                                                                                                         1,813             385          2,590
Non-US                                                                                                     7,282           7,075          6,311
                                                                                                           9,095           7,460          8,901

  (a)   IFRS requires that the measure of profit or loss disclosed for each operating segment is the measure that is provided regularly to the
        chief operating decision maker for the purposes of performance assessment and resource allocation. For BP, this measure of profit
        or loss is replacement cost profit or loss before interest and tax. In addition, a reconciliation is required between the total of the
        operating segments' measures of profit or loss and the group profit or loss before taxation.
  (b)   Replacement cost profit or loss reflects the replacement cost of supplies. The replacement cost profit or loss for the period is arrived
        at by excluding from profit or loss inventory holding gains and losses and their associated tax effect. Replacement cost profit or loss
        for the group is not a recognized GAAP measure.
  (c)   Inventory holding gains and losses represent the difference between the cost of sales calculated using the average cost to BP of
        supplies acquired during the period and the cost of sales calculated on the first-in first-out (FIFO) method after adjusting for any
        changes in provisions where the net realizable value of the inventory is lower than its cost. Under the FIFO method, which we use
        for IFRS reporting, the cost of inventory charged to the income statement is based on its historic cost of purchase, or manufacture,
        rather than its replacement cost. In volatile energy markets, this can have a significant distorting effect on reported income. The
        amounts disclosed represent the difference between the charge (to the income statement) for inventory on a FIFO basis (after
        adjusting for any related movements in net realizable value provisions) and the charge that would have arisen if an average cost of
        supplies was used for the period. For this purpose, the average cost of supplies during the period is principally calculated on a
        monthly basis by dividing the total cost of inventory acquired in the period by the number of barrels acquired. The amounts disclosed
        are not separately reflected in the financial statements as a gain or loss. No adjustment is made in respect of the cost of inventories
        held as part of a trading position and certain other temporary inventory positions.

        Management believes this information is useful to illustrate to investors the fact that crude oil and product prices can vary
        significantly from period to period and that the impact on our reported result under IFRS can be significant. Inventory holding gains
        and losses vary from period to period due principally to changes in oil prices as well as changes to underlying inventory levels. In
        order for investors to understand the operating performance of the group excluding the impact of oil price changes on the
        replacement of inventories, and to make comparisons of operating performance between reporting periods, BP’s management
        believes it is helpful to disclose this information.


                                                                                                                                                17
                                                     Non-operating items(a)

                                                                                                             First          Fourth           First
                                                                                                           quarter         quarter         quarter
                                                                                                             2011             2010           2010
$ million
Exploration and Production
Impairment and gain (loss) on sale of businesses and fixed assets                                             1,089           1,430             (13)
Environmental and other provisions                                                                                 –               –                 –
Restructuring, integration and rationalization costs                                                               –             (14)          (104)
Fair value gain (loss) on embedded derivatives                                                                 (328)             (23)           146
Other                                                                                                           (51)             (37)            12
                                                                                                                710           1,356              41
Refining and Marketing
Impairment and gain (loss) on sale of businesses and fixed assets                                                  5            145             (45)
Environmental and other provisions                                                                                 –             (15)                –
Restructuring, integration and rationalization costs                                                              (1)            (47)            12
Fair value gain (loss) on embedded derivatives                                                                     –               –                 –
Other                                                                                                           (21)               3            (37)
                                                                                                                (17)             86             (70)
Other businesses and corporate
Impairment and gain (loss) on sale of businesses and fixed assets                                                35              (23)           (68)
Environmental and other provisions                                                                                 –             (22)                –
Restructuring, integration and rationalization costs                                                               1             (13)           (38)
Fair value gain (loss) on embedded derivatives(b)                                                              (217)               –                 –
Other                                                                                                              –              (9)           (12)
                                                                                                               (181)             (67)          (118)
Gulf of Mexico oil spill response                                                                              (384)         (1,010)                  –
Total before interest and taxation                                                                              128             365            (147)
Finance costs(c)                                                                                                (16)             (30)                –
Total before taxation                                                                                           112             335            (147)
Taxation credit (charge)(d)                                                                                      44            (167)             50
Total after taxation for period                                                                                 156             168             (97)

   (a)   An analysis of non-operating items by region is shown on pages 7, 9 and 10.
   (b)   First quarter 2011 includes a loss on an embedded derivative arising from a financing arrangement.
   (c)   Finance costs relate to the Gulf of Mexico oil spill. See Note 2 on pages 21 – 26 for further details.
   (d)   Tax is calculated using the quarter’s effective tax rate (excluding the impact of the Gulf of Mexico oil spill and, for the first quarter
         2011, the impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary
         charge on UK oil and gas production) on replacement cost profit or loss. However, the US statutory tax rate has been used for
         expenditures relating to the Gulf of Mexico oil spill that qualify for tax relief.

Non-operating items are charges and credits arising in consolidated entities that BP discloses separately because it considers
such disclosures to be meaningful and relevant to investors. These disclosures are provided in order to enable investors
better to understand and evaluate the group’s financial performance.




                                                                                                                                                     18
                     Non-GAAP information on fair value accounting effects

                                                                                                             First          Fourth           First
                                                                                                           quarter         quarter         quarter
$ million                                                                                                    2011             2010           2010
Favourable (unfavourable) impact relative to
 management’s measure of performance
Exploration and Production                                                                                       29              (12)            63
Refining and Marketing                                                                                         (100)            134              10
                                                                                                                (71)            122              73
Taxation credit (charge)(a)                                                                                      22              (40)           (25)
                                                                                                                (49)             82              48

   (a)   Tax is calculated using the quarter’s effective tax rate (excluding the impact of the Gulf of Mexico oil spill and, for the first quarter
         2011, the impact of a $683-million one-off deferred tax adjustment in respect of the recently enacted increase in the supplementary
         charge on UK oil and gas production) on replacement cost profit or loss.

BP uses derivative instruments to manage the economic exposure relating to inventories above normal operating
requirements of crude oil, natural gas and petroleum products. Under IFRS, these inventories are recorded at historic cost.
The related derivative instruments, however, are required to be recorded at fair value with gains and losses recognized in
income because hedge accounting is either not permitted or not followed, principally due to the impracticality of effectiveness
testing requirements. Therefore, measurement differences in relation to recognition of gains and losses occur. Gains and
losses on these inventories are not recognized until the commodity is sold in a subsequent accounting period. Gains and
losses on the related derivative commodity contracts are recognized in the income statement from the time the derivative
commodity contract is entered into on a fair value basis using forward prices consistent with the contract maturity.

BP enters into commodity contracts to meet certain business requirements, such as the purchase of crude for a refinery or
the sale of BP’s gas production. Under IFRS these contracts are treated as derivatives and are required to be fair valued when
they are managed as part of a larger portfolio of similar transactions. Gains and losses arising are recognized in the income
statement from the time the derivative commodity contract is entered into.

IFRS requires that inventory held for trading be recorded at its fair value using period end spot prices whereas any related
derivative commodity instruments are required to be recorded at values based on forward prices consistent with the contract
maturity. Depending on market conditions, these forward prices can be either higher or lower than spot prices resulting in
measurement differences.

BP enters into contracts for pipelines and storage capacity, oil and gas processing and liquefied natural gas (LNG) that, under
IFRS, are recorded on an accruals basis. These contracts are risk-managed using a variety of derivative instruments, which are
fair valued under IFRS. This results in measurement differences in relation to recognition of gains and losses.

The way that BP manages the economic exposures described above, and measures performance internally, differs from the
way these activities are measured under IFRS. BP calculates this difference for consolidated entities by comparing the IFRS
result with management’s internal measure of performance. Under management’s internal measure of performance the
inventory, capacity, oil and gas processing and LNG contracts in question are valued based on fair value using relevant
forward prices prevailing at the end of the period and the commodity contracts for business requirements are accounted for
on an accruals basis. We believe that disclosing management’s estimate of this difference provides useful information for
investors because it enables investors to see the economic effect of these activities as a whole. The impacts of fair value
accounting effects, relative to management’s internal measure of performance, are shown in the table above. A reconciliation
to GAAP information is set out below.

Reconciliation of non-GAAP information

                                                                                                             First          Fourth           First
                                                                                                           quarter         quarter         quarter
$ million                                                                                                    2011             2010           2010
Exploration and Production
Replacement cost profit before interest and tax adjusted for
 fair value accounting effects                                                                                8,391           8,012           8,229
Impact of fair value accounting effects                                                                          29              (12)            63
Replacement cost profit before interest and tax                                                               8,420           8,000           8,292

Refining and Marketing
Replacement cost profit before interest and tax adjusted for
 fair value accounting effects                                                                                2,179             830             719
Impact of fair value accounting effects                                                                        (100)            134              10
Replacement cost profit before interest and tax                                                               2,079             964             729


                                                                                                                                                     19
                                          Realizations and marker prices

                                                                                                        First    Fourth     First
                                                                                                      quarter   quarter   quarter
                                                                                                        2011       2010     2010

Average realizations(a)
Liquids ($/bbl)(b)
US                                                                                                      86.53     74.60     69.77
Europe                                                                                                102.37      85.30     75.71
Rest of World                                                                                           99.68     82.30     72.94
BP Average                                                                                              93.93     78.80     71.86
Natural gas ($/mcf)
US                                                                                                       3.20      3.31      4.84
Europe                                                                                                   7.04      6.76      4.91
Rest of World                                                                                            4.41      4.05      3.90
BP Average                                                                                               4.21      3.98      4.26
Total hydrocarbons ($/boe)
US                                                                                                      60.30     53.60     54.54
Europe                                                                                                  85.08     71.48     60.39
Rest of World                                                                                           52.79     43.70     42.20
BP Average                                                                                              59.02     50.41     49.16
Average oil marker prices ($/bbl)
Brent                                                                                                 105.43      86.46     76.36
West Texas Intermediate                                                                                 94.49     85.13     78.84
Alaska North Slope                                                                                    103.22      85.92     79.14
Mars                                                                                                  101.95      84.19     75.85
Urals (NWE– cif)                                                                                      102.55      85.16     75.31
Russian domestic oil                                                                                    49.18     40.62     35.52
Average natural gas marker prices
Henry Hub gas price ($/mmBtu)(c)                                                                         4.11      3.80      5.30
UK Gas – National Balancing Point (p/therm)                                                             56.94     52.43     35.65

  (a)   Based on sales of consolidated subsidiaries only – this excludes equity-accounted entities.
  (b)   Crude oil and natural gas liquids.
  (c)   Henry Hub First of Month Index.




                                                                                                                               20
                                                        Notes

1.   Basis of preparation
     The interim financial information included in this report has been prepared in accordance with IAS 34 ‘Interim
     Financial Reporting’.

     The results for the interim periods are unaudited and in the opinion of management include all adjustments
     necessary for a fair presentation of the results for the periods presented. All such adjustments are of a normal
     recurring nature. This report should be read in conjunction with the consolidated financial statements and related
     notes for the year ended 31 December 2010 included in the BP Annual Report and Form 20-F 2010.

     BP prepares its consolidated financial statements included within its Annual Report and Accounts on the basis of
     International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB),
     IFRS as adopted by the European Union (EU) and in accordance with the provisions of the UK Companies Act 2006.
     IFRS as adopted by the EU differs in certain respects from IFRS as issued by the IASB, however, the differences
     have no impact on the group’s consolidated financial statements for the periods presented. The financial information
     presented herein has been prepared in accordance with the accounting policies expected to be used in preparing BP
     Annual Report and Form 20-F 2011, which do not differ significantly from those used in the BP Annual Report and
     Form 20-F 2010.

     New or amended International Financial Reporting Standards adopted

     There are no new or amended standards or interpretations adopted with effect from 1 January 2011 that have a
     significant impact on the financial statements.


2.   Gulf of Mexico oil spill
     (a) Overview

     As a consequence of the Gulf of Mexico oil spill, BP continues to incur costs and has also recognized liabilities for
     future costs. The information presented in this note should be read in conjunction with BP Annual Report and
     Form 20-F 2010 – Financial Statements – Note 2, Note 37 and Note 44.

     The group income statement for 2010 included a pre-tax charge of $40,935 million in relation to the Gulf of Mexico
     oil spill. The amounts set out below reflect the impacts on the financial statements of the Gulf of Mexico oil spill for
     the periods presented, as described on pages 2 – 3. The income statement, balance sheet and cash flow statement
     impacts are included within the relevant line items in those statements as set out below.

                                                                                            First        Fourth         First
                                                                                          quarter       quarter       quarter
     $ million                                                                              2011           2010         2010

     Income statement
     Production and manufacturing expenses                                                    384         1,010                 –
     Profit (loss) before interest and taxation                                              (384)       (1,010)                –
     Finance costs                                                                             16            30                 –
     Profit (loss) before taxation                                                           (400)       (1,040)                –
     Less: Taxation                                                                           201           287                 –
     Profit (loss) for the period                                                            (199)         (753)                –




                                                                                                                             21
                                                        Notes

2.   Gulf of Mexico oil spill (continued)
                                                                       31 March 2011                 31 December 2010
                                                                                   Of which:                       Of which:
                                                                             amount related                  amount related
                                                                      Total to the trust fund         Total to the trust fund
     $ million

     Balance sheet
     Current assets
      Trade and other receivables                                     5,981              5,981        5,943              5,943
     Current liabilities
      Trade and other payables                                       (6,031)            (5,001)       (6,587)            (5,002)
      Provisions                                                     (7,379)                 –        (7,938)                 –
     Net current assets (liabilities)                                (7,429)               980        (8,582)               941
     Non-current assets
      Other receivables                                               3,563              3,563        3,601              3,601
     Non-current liabilities
      Other payables                                                 (8,667)            (8,667)       (9,899)            (9,899)
      Provisions                                                     (8,098)                 –        (8,397)                 –
      Deferred tax                                                   11,218                  –       11,255                   –
     Net non-current liabilities                                     (1,984)            (5,104)       (3,440)            (6,298)

     Net assets                                                      (9,413)            (4,124)      (12,022)            (5,357)



                                                                                           First         Fourth           First
                                                                                         quarter        quarter         quarter
     $ million                                                                             2011            2010           2010

     Cash flow statement – Operating activities
     Profit (loss) before taxation                                                           (400)        (1,040)             –
     Adjustments to reconcile profit (loss) before taxation
      to net cash provided by operating activities
     Net charge for interest and other finance
       expense, less net interest paid                                                        16             30               –
     Net charge for provisions, less payments                                                202          2,117               –
     Movements in inventories and other current
       and non-current assets and liabilities                                              (2,864)        (6,542)             –
     Pre-tax cash flows                                                                    (3,046)        (5,435)             –

     Net cash used in operating activities relating to the Gulf of Mexico oil spill, on a post-tax basis, amounted to
     $2,808 million in the first quarter 2011 and $5,415 million in the fourth quarter 2010.

     Trust fund

     In 2010, BP established the Deepwater Horizon Oil Spill Trust (the Trust) to be funded in the amount of $20 billion
     over the period to the fourth quarter of 2013, which is available to satisfy legitimate individual and business claims
     administered by the Gulf Coast Claims Facility (GCCF), state and local government claims resolved by BP, final
     judgments and settlements, state and local response costs, and natural resource damages and related costs. In 2010
     BP contributed $5 billion to the fund, and a further contribution of $1.25 billion was made in the first quarter of 2011.
     The income statement charge for 2010 included $20 billion in relation to the trust fund, adjusted to take account of
     the time value of money. Fines, penalties and claims administration costs are not covered by the trust fund.




                                                                                                                             22
                                                         Notes

2.   Gulf of Mexico oil spill (continued)
     The table below shows movements in the funding obligation during the period to 31 March 2011. This liability is
     recognized within other payables on the balance sheet apportioned between current and non-current elements
     according to the agreed schedule of contributions.

                                                                                                                       $ million

     At 1 January 2011                                                                                                    14,901
     Unwinding of discount                                                                                                    14
     Contribution                                                                                                         (1,250)
     Other                                                                                                                     3
     At 31 March 2011                                                                                                     13,668
     Of which – current                                                                                                    5,001
                – non-current                                                                                              8,667

     An asset has been recognized representing BP’s right to receive reimbursement from the trust fund. This is the
     portion of the estimated future expenditure provided for that will be settled by payments from the trust fund. We
     use the term “reimbursement asset” to describe this asset. BP will not actually receive any reimbursements from
     the trust fund, instead payments will be made directly to claimants from the trust fund, and BP will be released from
     its corresponding obligation. The reimbursement asset is recorded within other receivables on the balance sheet
     apportioned between current and non-current elements. The table below shows movements in the reimbursement
     asset during the period to 31 March 2011. The amount of the reimbursement asset at 31 March 2011 is equal to the
     amount of provisions recognized at that date that will be covered by the trust fund – see below.

                                                                                                                       $ million

     At 1 January 2011                                                                                                     9,544
     Increase in provision for items covered by the trust fund                                                             1,062
     Amounts paid directly by the trust fund                                                                              (1,062)
     At 31 March 2011                                                                                                      9,544
     Of which – current                                                                                                    5,981
                – non-current                                                                                              3,563



     As noted above, the obligation to fund the $20-billion trust fund has been recognized in full. Any increases in the
     provision that will be covered by the trust fund (up to the amount of $20 billion) have no net income statement effect
     as a reimbursement asset is also recognized, as described above. As at 31 March 2011, the cumulative charges for
     provisions, and the associated reimbursement asset recognized, amounted to $13,629 million. Thus, a further
     $6,371 million could be provided in subsequent periods for items covered by the trust fund with no net impact on
     the income statement. Such future increases in amounts provided could arise from adjustments to existing
     provisions, or from the initial recognition of provisions for items that currently cannot be estimated reliably, namely
     final judgments and settlements and natural resource damages and related costs. Further information on those items
     that currently cannot be reliably estimated is provided under Provisions and contingencies below.

     It is not possible at this time to conclude whether the $20-billion trust fund will be sufficient to satisfy all claims
     under the Oil Pollution Act 1990 (OPA 90) that will ultimately be paid.

     The Trust agreement does not require BP to make further contributions to the trust fund in excess of the agreed $20
     billion should this be insufficient to cover all claims administered by the GCCF, or to settle other items that are
     covered by the trust fund, as described above. Should the $20-billion trust fund not be sufficient, BP would
     commence settling legitimate claims and other costs by making payments directly to claimants. In this case,
     increases in estimated future expenditure above $20 billion would be recognized as provisions with a corresponding
     charge in the income statement. The provisions would be utilized and derecognized at the point that BP made the
     payments.




                                                                                                                               23
                                                        Notes

2.   Gulf of Mexico oil spill (continued)
     (b) Provisions and contingencies

     BP has recorded certain provisions and disclosed certain contingencies as a consequence of the Gulf of Mexico oil
     spill. These are described below and in more detail in BP Annual Report and Form 20-F 2010 – Financial statements –
     Notes 2, 37 and 44.

     Provisions

     BP has recorded provisions relating to the Gulf of Mexico oil spill in relation to environmental expenditure, spill
     response costs, litigation and claims, and Clean Water Act penalties.

     On 21 April 2011, BP entered a framework agreement with natural resource trustees for the United States and five
     Gulf coast states, providing for up to $1 billion to be spent on early restoration projects to address natural resource
     injuries resulting from the Gulf of Mexico oil spill. Funding for these projects will come from the $20-billion
     Deepwater Horizon Oil Spill Trust. BP will work with the trustees of the Deepwater Horizon Oil Spill Trust to
     segregate funds to be made available to pay for early restoration projects and other NRD claims. This agreement has
     no impact on BP's first-quarter profit as the full amount of the trust fund has been previously expensed. A provision
     of $1 billion has been recorded and a corresponding reimbursement asset has been recognized.

     BP considers that it is not possible to measure reliably any obligation in relation to Natural Resources Damages
     claims under OPA 90 (other than the costs of the early restoration projects referred to above) or litigation for
     violations of OPA 90, any amounts in relation to fines and penalties except for those relating to the Clean Water Act
     and any obligation in relation to litigation or in relation to legal fees beyond 2012. These items are therefore disclosed
     as contingent liabilities – see below.

     Movements in the provision are presented in the table below.

                                                                                                                     $ million
                                                                         Spill      Litigation Clean Water
                                               Environmental         response      and claims Act penalties                Total

     At 1 January 2011                                      809          1,043          10,973           3,510         16,335
     Increase in provision – items not
       covered by the trust fund                               –           302                –               –             302
     Increase in provision – items covered
       by the trust fund                                  1,000               –             62                –            1,062
     Unwinding of discount                                     2              –               –               –               2
     Utilization – paid by BP                                 (3)         (875)           (284)               –        (1,162)
                  – paid by the trust fund                  (68)              –           (994)               –        (1,062)
     At 31 March 2011                                     1,740            470           9,757           3,510         15,477
     Of which – current                                     799            470           6,110                –            7,379
                – non-current                               941               –          3,647           3,510             8,098
     Of which – payable from the trust fund               1,313               –          8,231                –            9,544

     The total charge in the income statement for the first quarter of 2011 is analysed in the table below.

                                                                                                                     $ million

     Increase in provision                                                                                                 1,364
     Recognition of reimbursement asset                                                                                (1,062)
     Other costs charged directly to the income statement                                                                    82
     (Profit) loss before interest and taxation                                                                             384
     Finance costs                                                                                                           16
     (Profit) loss before taxation                                                                                          400




                                                                                                                              24
                                                         Notes

2.   Gulf of Mexico oil spill (continued)
     The total amounts that will ultimately be paid by BP in relation to all obligations relating to the incident are subject to
     significant uncertainty and the ultimate exposure and cost to BP will be dependent on many factors. Furthermore,
     the amount of claims that become payable by BP, the amount of fines ultimately levied on BP (including any
     determination of BP’s negligence), the outcome of litigation and arbitration proceedings, and any costs arising from
     any longer-term environmental consequences of the oil spill, will also impact upon the ultimate cost for BP.

     In estimating the amount of the provision at 31 March 2011 for Individual and Business Claims and State and Local
     Claims, BP has concluded that a reasonable range of possible outcomes is $5 billion to $12 billion. BP believes that
     the provision recorded at 31 March 2011 of $8.1 billion represents a reliable best estimate from within this range of
     possible outcomes. This amount is included within amounts payable from the trust fund under Litigation and claims
     in the table above.

     Although the provision recognized is the current best reliable estimate of expenditures required to settle certain
     present obligations at the end of the reporting period, there are future expenditures for which it is not possible to
     measure the obligation reliably as noted below under Contingent liabilities.

     No amounts have been recognized for recovery of costs from our co-owners of the Macondo well because under
     IFRS recovery must be virtually certain for these receivables to be recognized. All of these items are therefore
     disclosed as contingent assets.

     Further information on provisions is provided in BP Annual Report and Form 20-F 2010 – Financial statements – Note
     37.

     Contingent liabilities

     BP has provided for its best estimate of certain claims under OPA 90 that will be paid through the $20-billion trust
     fund. It is not possible, at this time, to measure reliably any other items that will be paid from the trust fund, namely
     any obligation in relation to Natural Resource Damages claims (except for costs relating to early restoration projects
     as described above under Provisions) and claims asserted in civil litigation, nor is it practicable to estimate their
     magnitude or possible timing of payment. Therefore no amounts have been provided for these items as of 31 March
     2011.

     For those items not covered by the trust fund it is not possible to measure reliably any obligation in relation to other
     litigation or potential fines and penalties except, subject to certain assumptions, for those relating to the Clean Water
     Act. It is also not possible to reliably estimate legal fees beyond 2012. Therefore no amounts have been provided for
     these items as of 31 March 2011.

     See Legal proceedings on pages 31 – 37 and BP Annual Report and Form 20-F 2010 – Financial statements – Note
     44 for further information on contingent liabilities.

     Contingent assets

     See Legal proceedings on pages 31 – 37 and BP Annual Report and Form 20-F 2010 – Financial statements –
     Note 44 for information on contingent assets.

     As of 31 March 2011, $7 billion had been billed to the co-owners, Anadarko Petroleum Corporation (Anadarko) and
     MOEX Offshore 2007 LLC (MOEX), which BP believes to be contractually recoverable pursuant to the terms of the
     Macondo Prospect Offshore Deepwater Operating Agreement. Billings to co-owners under this Operating
     Agreement are based upon costs incurred to date rather than amounts provided in the period. As further costs are
     incurred, BP believes that certain of the costs will be billable to our co-owners under the Operating Agreement. No
     recovery amounts have been recognized in the financial statements as at 31 March 2011.

     On 4 April 2011, BP initiated contractual out-of-court dispute resolution proceedings against Anadarko and MOEX,
     claiming that they have breached the parties’ contract by failing to reimburse BP for their working-interest share of
     incident-related costs. These procedures will culminate in arbitration if the parties cannot resolve their disputes
     through negotiation. On 19 April 2011, MOEX filed a cross-claim against BP in the federal Limitation of Liability
     action, alleging negligence, breach of contract, and seeking a declaration that MOEX is excused from paying charges
     related to the incident. MOEX also alleges economic losses, including damage to the reservoir, defence costs, and
     contribution or indemnity for claims against it by other parties. Also on 19 April 2011, Anadarko filed a cross-claim
     against BP, alleging gross negligence and 15 other counts under state and federal laws. Like MOEX, Anadarko seeks
     a declaration that it is excused from its contractual obligation to pay incident-related costs. Anadarko also seeks
     damages from alleged economic losses and contribution or indemnity for claims filed against it by other parties. BP
     disputes Anadarko’s and MOEX’s cross-claims and intends to defend against them vigorously.




                                                                                                                              25
                                                       Notes

2.   Gulf of Mexico oil spill (continued)
     There are also audit rights concerning billings under the Operating Agreement which may be exercised by Anadarko
     and MOEX, and which may or may not lead to an adjustment of the amount billed. BP may ultimately need to
     enforce its rights to collect payment from the co-owners following any successful arbitration proceedings as
     provided for in the Operating Agreement. There is a risk that amounts billed to co-owners may not ultimately be
     recovered should our co-owners be found not liable for these costs or be unable to pay them. Moreover,
     negotiations amongst co-owners could result in settlement(s) of these claims, which if reached, may result in
     amounts to be received by BP differing from the amounts billed.


3.   Non-current assets held for sale
     As a result of the group’s disposal programme following the Gulf of Mexico oil spill, various assets, and associated
     liabilities, have been presented as held for sale in the group balance sheet at 31 March 2011. The carrying amount of
     the assets held for sale is $6,241 million, with associated liabilities of $1,013 million. Included within these amounts
     are the following items, all of which relate to the Exploration and Production segment unless otherwise stated.

     On 14 December 2010, BP announced that it had reached agreement to sell its exploration and production assets in
     Pakistan to United Energy Group Limited for $775 million in cash. These assets, and associated liabilities, have been
     classified as held for sale in the group balance sheet at 31 March 2011. The sale is expected to be completed in the
     second quarter of 2011, subject to certain conditions precedent, including the satisfaction of closing conditions, the
     receipt of government and regulatory approvals, and the lifting of an interim injunction entered by the Islamabad High
     Court on 9 March 2011 in a preferential rights dispute affecting the Mirpur Khas and Khipro concessions.

     On 18 October 2010, BP announced that it had reached agreement to sell its upstream and midstream assets in
     Vietnam, together with its upstream businesses and associated interests in Venezuela, to TNK-BP for $1.8 billion in
     cash, subject to post-closing adjustments. The Venezuelan assets include BP’s interests in the Petroperijá, Boquerón
     and PetroMonagas joint ventures. These assets, and associated liabilities, have been classified as held for sale in the
     group balance sheet at 31 March 2011. The sales of the Vietnam and Venezuela businesses are expected to be
     completed in the second quarter of 2011, subject to regulatory and other approvals and conditions.

     On 28 November 2010, BP announced that it had reached agreement to sell its interests in Pan American Energy
     (PAE) to Bridas Corporation for $7.06 billion in cash. PAE is an Argentina-based oil and gas company owned by BP
     (60%) and Bridas Corporation (40%). The transaction excludes the shares of PAE E&P Bolivia Ltd. BP’s investment in
     PAE has been classified as held for sale in the group balance sheet at 31 March 2011. The sale is expected to be
     completed in 2011, subject to closing conditions and government and regulatory approvals.

     On 4 April 2011, BP announced that it had agreed the sale of its wholly-owned subsidiary, ARCO Aluminium Inc.
     (reported within Other businesses and corporate), to a consortium of Japanese companies for cash consideration of
     $680 million, subject to closing adjustments. The assets, and associated liabilities, of this subsidiary have been
     classified as held for sale in the group balance sheet at 31 March 2011. Subject to obtaining required regulatory
     approvals, the parties expect to complete the transaction in the third quarter of 2011.

     In Canada, BP intends to dispose of its NGL business. The assets, and associated liabilities, of this business have
     been classified as held for sale in the group balance sheet at 31 March 2011. The sale is expected to be completed
     in 2011.

     Disposal proceeds of $4,630 million ($6,197 million at 31 December 2010) received in advance of completion of
     certain of these transactions have been classified as finance debt on the group balance sheet. See Note 7 for further
     information.

     The majority of the transactions noted above are subject to post-closing adjustments, which may include
     adjustments for working capital and adjustments for profits attributable to the purchaser between the agreed
     effective date and the closing date of the transaction. Such post-closing adjustments may result in the final amounts
     received by BP from the purchasers differing from the disposal proceeds noted above.




                                                                                                                           26
                                                      Notes

4.   Sales and other operating revenues
                                                                First    Fourth     First
                                                              quarter   quarter   quarter
                                                                2011       2010     2010
     $ million
     By business
     Exploration and Production                               18,405    17,759    18,080
     Refining and Marketing                                   77,433    71,161    64,286
     Other businesses and corporate                              856       985       790
                                                              96,694    89,905    83,156

     Less: sales between businesses
     Exploration and Production                               10,525      9,536     9,746
     Refining and Marketing                                      626       467       135
     Other businesses and corporate                              214       199       204
                                                              11,365    10,202    10,085

     Third party sales and other operating revenues
     Exploration and Production                                 7,880     8,223     8,334
     Refining and Marketing                                   76,807    70,694    64,151
     Other businesses and corporate                              642       786       586
     Total third party sales and other operating revenues     85,329    79,703    73,071

     By geographical area
     US                                                       30,847    27,635    26,108
     Non-US                                                   63,855    60,121    54,009
                                                              94,702    87,756    80,117
     Less: sales between areas                                  9,373     8,053     7,046
                                                              85,329    79,703    73,071



5.   Production and similar taxes
                                                                First    Fourth     First
                                                              quarter   quarter   quarter
                                                                2011       2010     2010
     $ million
     US                                                          374       351       313
     Non-US                                                     1,457     1,173      963
                                                                1,831     1,524     1,276




                                                                                       27
                                                            Notes

6.   Earnings per share and shares in issue
     Basic earnings per ordinary share (EpS) amounts are calculated by dividing the profit or loss for the period
     attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the
     period. The calculation of EpS is performed separately for each discrete quarterly period, and for the year-to-date
     period. As a result, the sum of the discrete quarterly EpS amounts in any particular year-to-date period may not be
     equal to the EpS amount for the year-to-date period.

     For the diluted EpS calculation the weighted average number of shares outstanding during the period is adjusted for
     the number of shares that are potentially issuable in connection with employee share-based payment plans using the
     treasury stock method. If the inclusion of potentially issuable shares would decrease the loss per share, the
     potentially issuable shares are excluded from the diluted EpS calculation.

                                                                                                 First         Fourth          First
                                                                                               quarter        quarter        quarter
                                                                                                 2011           2010           2010
     $ million
     Results for the period
     Profit for the period attributable to BP shareholders                                       7,124          5,567          6,079
     Less: preference dividend                                                                        –              1              –
     Profit attributable to BP ordinary shareholders                                             7,124          5,566          6,079
     Inventory holding gains net of tax                                                         (1,643)          (953)          (481)
     RC profit attributable to BP ordinary shareholders                                          5,481          4,613          5,598

     Basic weighted average number of shares outstanding (thousand)(a)                     18,816,868     18,793,234     18,769,888
       ADS equivalent (thousand)(a)                                                         3,136,145      3,132,206      3,128,315

     Weighted average number of shares outstanding used to
      calculate diluted earnings per share (thousand)(a)                                   19,038,387     19,008,309     19,004,740
       ADS equivalent (thousand)(a)                                                         3,173,065      3,168,052      3,167,457

     Shares in issue at period-end (thousand)(a)                                           18,866,532     18,796,498     18,784,361
       ADS equivalent (thousand)(a)                                                         3,144,422      3,132,750      3,130,727

        (a)   Excludes treasury shares and the shares held by the Employee Share Ownership Plans and includes certain shares that
              will be issued in the future under employee share plans.

     On 14 January 2011, BP entered into a share swap agreement with Rosneft Oil Company that has since been
     subject to an interim injunction granted by the English High Court and continued by an UNCITRAL arbitral tribunal
     which is referred to in Legal proceedings. Completion of the share swap agreement is prohibited at this time by the
     interim injunction, but if the interim injunction were to be lifted and the share swap agreement were to be
     completed then it would result in BP issuing 988,694,683 new ordinary shares to Rosneft.




                                                                                                                                    28
                                                             Notes

7.   Analysis of changes in net debt
                                                                                                   First         Fourth           First
                                                                                                 quarter        quarter         quarter
                                                                                                   2011            2010           2010
     $ million
     Opening balance
     Finance debt                                                                                 45,336         39,979          34,627
     Less: Cash and cash equivalents                                                              18,556         12,803           8,339
     Less: FV asset of hedges related to finance debt                                                916             797            127
     Opening net debt                                                                             25,864         26,379          26,161

     Closing balance
     Finance debt                                                                                 47,102         45,336          32,153
     Less: Cash and cash equivalents                                                              18,726         18,556           6,841
     Less: FV asset of hedges related to finance debt                                                870             916            152
     Closing net debt                                                                             27,506         25,864          25,160
     Decrease (increase) in net debt                                                              (1,642)            515          1,001


     Movement in cash and cash equivalents
      (excluding exchange adjustments)                                                                (25)         5,924         (1,421)
     Net cash outflow (inflow) from financing
      (excluding share capital)                                                                   (3,244)         (4,033)         2,400
     Movement in finance debt relating to investing activities(a)                                  1,595          (1,152)              –
     Other movements                                                                                  (21)          (185)              7
     Movement in net debt before exchange effects                                                 (1,695)            554            986
     Exchange adjustments                                                                              53            (39)             15
     Decrease (increase) in net debt                                                              (1,642)            515          1,001

        (a)   During the first quarter 2011 disposal transactions were completed in respect of which deposits of $1,595 million had been
              received in 2010.

     At 31 March 2011 $796 million of finance debt ($790 million at 31 December 2010, nil at 31 March 2010) was
     secured by the pledging of assets, and $3,530 million was secured in connection with deposits received relating to
     certain disposal transactions expected to complete in subsequent periods ($4,780 million at 31 December 2010). In
     addition, in connection with $3,799 million of finance debt ($4,588 million at 31 December 2010), BP has entered
     into crude oil sales contracts in respect of oil produced from certain fields in offshore Angola and Azerbaijan to
     provide security to the lending banks. The remainder of finance debt was unsecured.

     During the first quarter 2011 the company signed new three-year committed standby facilities totalling $6.8 billion,
     available to draw and repay until mid-March 2014, largely replacing existing arrangements. At 31 March 2011 the
     total available undrawn committed borrowing facilities stood at $7.5 billion ($12.5 billion at 31 December 2010).




                                                                                                                                      29
                                                                 Notes

8.    TNK-BP operational and financial information
                                                                                                             First       Fourth       First
                                                                                                           quarter      quarter     quarter
                                                                                                             2011          2010       2010
      Production (Net of royalties) (BP share)
      Crude oil (mb/d)                                                                                        856           858        849
      Natural gas (mmcf/d)                                                                                    719           698        673
      Total hydrocarbons (mboe/d)(a)                                                                          980           978        965
      $ million
      Income statement (BP share)
      Profit before interest and tax                                                                         1,526        1,263         788
      Finance costs                                                                                            (35)         (30)        (38)
      Taxation                                                                                                (246)        (311)       (168)
      Minority interest                                                                                        (59)         (68)        (39)
      Net income                                                                                             1,186          854         543
      Cash flow
      Dividends received                                                                                         –          790        256

      Balance sheet                                                                                                   31 March 31 December
                                                                                                                           2011       2010
      Investments in associates                                                                                          11,193       9,995

         (a)   Natural gas is converted to oil equivalent at 5.8 billion cubic feet = 1 million barrels.



9.    Subsequent events
      On 22 February 2011, BP announced its intention to sell its interests in a number of operated oil and gas fields in the
      UK. The assets involved are the Wytch Farm onshore oilfield in Dorset and all of BP’s operated gas fields in the
      southern North Sea, including associated pipeline infrastructure and the Dimlington terminal. BP aims to complete
      the divestments around the end of 2011, subject to receipt of suitable offers and regulatory and third-party
      approvals. The assets did not meet the criteria to be classified as assets held for sale in the group balance sheet at
      31 March 2011. However, subsequent to the quarter end, the proposed sale of the Wytch Farm onshore oilfield has
      progressed sufficiently that it has now met the criteria to be classified as held for sale.

      On 14 April 2011, BP announced that it had agreed with Rosneft to extend the deadline for satisfaction of conditions
      precedent for completion of their previously announced share swap agreement to 16 May 2011. The agreement
      between the two companies follows the 8 April decision of the arbitral tribunal to continue the interim injunction
      prohibiting completion of the share swap agreement but to allow them to discuss extension of the deadline. This
      means that the share swap agreement is now subject to a long-stop date for satisfaction of conditions precedent of
      16 May 2011, failing which the agreement will terminate. No amounts have been recorded in the first quarter in
      relation to the share swap agreement as it is subject to ongoing arbitration proceedings. See Legal Proceedings for
      more information.


10.   Statutory accounts

      The financial information shown in this publication, which was approved by the Board of Directors on 26 April 2011,
      is unaudited and does not constitute statutory financial statements. BP Annual Report and Form 20-F 2010 has been
      filed with the Registrar of Companies in England and Wales; the report of the auditors on those accounts was
      unqualified and did not contain a statement under section 498(2) or section 498(3) of the UK Companies Act 2006.




                                                                                                                                         30
                                                   Legal proceedings

Proceedings and investigations relating to the Gulf of Mexico oil spill
BP p.l.c., BP Exploration & Production Inc. (BP E&P) and various other BP entities (collectively referred to as BP) are among
the companies named as defendants in more than 450 private civil lawsuits resulting from the 20 April 2010 explosions and
fire on the semi-submersible rig Deepwater Horizon and resulting oil spill (the Incident) and further actions are likely to be
brought. BP E&P is lease operator of Mississippi Canyon, Block 252 in the Gulf of Mexico, where the Deepwater Horizon was
deployed at the time of the Incident, and holds a 65% working interest. The other working interest owners are Anadarko
Petroleum Company (Anadarko) and MOEX Offshore 2007 LLC (MOEX). The Deepwater Horizon, which was owned and
operated by certain affiliates of Transocean, Ltd. (Transocean), sank on 22 April 2010. The pending lawsuits and/or claims
arising from the Incident have been brought in US federal and state courts. Plaintiffs include individuals, corporations and
governmental entities and many of the lawsuits purport to be class actions. The lawsuits assert, among others, claims for
personal injury in connection with the Incident itself and the response to it, and wrongful death, commercial or economic
injury, breach of contract and violations of statutes. The lawsuits seek various remedies including compensation to injured
workers and families of deceased workers, recovery for commercial losses and property damage, claims for environmental
damage, remediation costs, injunctive relief, treble damages and punitive damages. Purported classes of claimants include
residents of the states of Louisiana, Mississippi, Alabama, Florida, Texas, Tennessee, Kentucky, Georgia and South Carolina,
property owners and rental agents, fishermen and persons dependent on the fishing industry, charter boat owners and deck
hands, marina owners, gasoline distributors, shipping interests, restaurant and hotel owners and others who are property
and/or business owners alleged to have suffered economic loss. Shareholder derivative lawsuits have also been filed in US
federal and state courts against various current and former officers and directors of BP alleging, among other things, breach
of fiduciary duty, gross mismanagement, abuse of control and waste of corporate assets. Purported class action lawsuits
have also been filed in US federal courts against BP entities and various current and former officers and directors alleging,
among other things, securities fraud claims, violations of the Employee Retirement Income Security Act (ERISA) and
contractual and quasi-contractual claims related to the cancellation of the dividend on 16 June 2010. In addition, BP has been
named in several lawsuits alleging claims under the Racketeer-Influenced and Corrupt Organizations Act (RICO). In August
2010, many of the lawsuits pending in federal court were consolidated by the Federal Judicial Panel on Multidistrict Litigation
into two multi-district litigation proceedings, one in federal court in Houston for the securities, derivative and ERISA cases and
another in federal court in New Orleans for the remaining cases. Since late September, most of the Deepwater Horizon
related cases have been pending before these courts.

On 18 February 2011, certain Transocean affiliates filed a third party complaint against BP, the US government, and other
corporations involved in the Incident, thereby naming those entities as formal parties in Transocean’s Limitation of Liability
action pending in federal court in New Orleans.

On 4 April 2011, BP initiated contractual out-of-court dispute resolution proceedings against Anadarko and MOEX, claiming
that they have breached the parties’ contract by failing to reimburse BP for their working-interest share of Incident-related
costs. These procedures will culminate in arbitration if the parties cannot resolve their disputes through negotiation. On 19
April 2011, MOEX filed a cross-claim against BP in the federal Limitation of Liability action, alleging negligence, breach of
contract, and seeking a declaration that MOEX is excused from paying charges related to the Incident. MOEX also alleges
economic losses, including damage to the reservoir, defense costs, and contribution or indemnity for claims against it by
other parties. Also on 19 April 2011, Anadarko filed a cross-claim against BP, alleging gross negligence and 15 other counts
under state and federal laws. Like MOEX, Anadarko seeks a declaration that it is excused from its contractual obligation to
pay Incident-related costs. Anadarko also seeks damages from alleged economic losses and contribution or indemnity for
claims filed against it by other parties.

On 20 April 2011, Transocean filed claims in Transocean’s Limitation of Liability action alleging that BP had breached BP
America Production Company’s contract with Transocean Holdings LLC by BP not agreeing to indemnify Transocean against
liability related to the Deepwater Horizon incident and by not paying certain invoices. Transocean also asserted claims against
BP under state law, maritime law, and the Oil Pollution Act of 1990 (OPA 90) for contribution. Also on 20 April 2011,
Halliburton Energy Services, Inc. (Halliburton), filed claims in Transocean’s Limitation of Liability action in which it sought
indemnification from BP for claims brought against Halliburton in that action, and Cameron International Corporation
(Cameron) asserted claims against BP for contribution under state law, maritime law, and OPA 90, as well as for contribution
on the basis of comparative fault. Halliburton also asserted a claim for negligence, gross negligence and wilful misconduct
against BP and others. On 19 April 2011, Halliburton filed a separate lawsuit in Texas state court seeking indemnification from
BP E&P for certain tort and pollution-related liabilities resulting from the Incident and resulting oil spill.

On 20 April 2011, BP asserted claims against Cameron, Halliburton, and Transocean in the Limitation of Liability action. BP’s
claims against Transocean include breach of contract, unseaworthiness of the Deepwater Horizon vessel, negligence (or
gross negligence and/or gross fault as may be established at trial based upon the evidence), contribution and subrogation for
costs (including those arising from litigation claims) resulting from the Incident and oil spill, as well as a declaratory claim that
Transocean is wholly or partly at fault for the Incident and responsible for its proportionate share of the costs and damages.
BP’s claims against Cameron assert that Cameron is liable under maritime law for providing a Blowout Preventer (BOP) that
was unreasonably dangerous in design based on certain design defects, that Cameron was negligent with respect to certain
maintenance and repair that it conducted on the Deepwater Horizon BOP, and that Cameron is liable to BP for contribution
and subrogation of the damages, costs and expenses that BP has paid and will continue to pay relating to BP’s response
efforts and the various claims brought against BP. BP asserted claims against Halliburton for fraud and fraudulent
concealment based on Halliburton's misrepresentations to BP concerning, among other things, the stability testing on the
foamed cement used at the Mississippi Canyon Block 252, well; for negligence (or, if established by the evidence at trial,


                                                                                                                                   31
                                       Legal proceedings (continued)

gross negligence) based on Halliburton's performance of its professional services, including cementing and mud logging
services; and for contribution and subrogation for amounts that BP has paid in responding to the Incident and oil spill, as well
as in OPA assessments and in payments to plaintiffs. Also on 20 April 2011, BP filed a complaint in federal court in the
Southern District of Texas, Houston Division, against Halliburton. That complaint alleges the same counts as BP’s claim
against Halliburton in Transocean’s Limitation of Liability action.

Under the Oil Pollution Act 1990 (OPA 90), BP E&P has been designated as one of the ‘responsible parties’ for the oil spill
resulting from the Incident. Accordingly, BP E&P is one of the parties that the US government alleges is financially
responsible for the clean-up of the spill and for economic damages as provided by OPA 90. In addition, pursuant to OPA 90,
the US Coast Guard has requested reimbursement from BP and the other responsible parties for its costs of responding to
the Incident, and BP has paid all amounts due as of the date hereof. Continuing requests for cost reimbursement are
expected from the US Coast Guard and other governmental authorities. In addition, BP is participating with federal and state
trustees in a co-operative assessment of potential natural resource damages associated with the spill. Under OPA 90, the US
government alleges that BP E&P is one of the parties financially responsible for paying the reasonable assessment costs
incurred by these trustees as well as natural resource damages that result from the Incident.

BP E&P has established and committed to fund the Deepwater Horizon Oil Spill Trust, a $20-billion trust fund to pay costs and
satisfy legitimate claims. BP E&P has contributed $6.25 billion to the trust fund at the end of the first quarter of 2011. This will
be supplemented by additional payments of $1.25 billion per quarter until a total of $20 billion has been paid into the trust
fund. While the trust fund is building, BP E&P has pledged collateral consisting of an overriding royalty interest in oil and gas
production from certain assets in the Gulf of Mexico sufficient at any time to secure the difference between the amount
deposited as of that date and $20 billion. The establishment of this trust does not represent a cap on BP’s liabilities, and BP
does not admit to a liability of this amount. The trust fund will pay claims administered by the GCCF, state and local
government claims resolved by BP, final judgments, settlements, state and local response costs, and natural resource
damages and related costs. Payments from the trust fund will be made upon adjudication or resolution of claims or the final
determination of other costs covered by the account. Upon the termination of the trust fund, the funds, if any remaining once
the claims process has been completed, will revert to BP E&P.

BP is subject to a number of investigations related to the Incident by numerous agencies of the US government. On 27 April
2010, the US Coast Guard and the Minerals Management Service (renamed the Bureau of Ocean Energy Management,
Regulation and Enforcement (BOEMRE) in June 2010) convened a joint investigation of the Incident by establishing a Marine
Board of Investigation (Marine Board of Investigation) aimed at determining the causes of the Incident and recommending
safety improvements. BP was designated as one of several Parties in Interest in the investigation. In a report dated 20 March
2011, the Joint Investigation Team (JIT) for the Marine Board of Investigation issued the Final Report of the Forensic
Examination of the Deepwater Horizon Blowout Preventer (BOP) prepared by Det Norske Veritas (BOP Report). BP has fully
supported the JIT investigation. The BOP Report concludes that the position of the drill pipe against the blind shear rams
prevented the BOP from functioning as intended. BP continues to review the BOP Report and agrees with the Report's
recommendation that additional testing should be completed to provide a more comprehensive view of why the BOP failed.
On 22 April 2011, the US Coast Guard issued its report (Maritime Report) focused upon the maritime aspects of the Incident.
The Maritime Report criticizes Transocean's maintenance operations and safety culture, while also criticizing the Republic of
the Marshall Islands – the flag state responsible for certifying Transocean’s Deepwater Horizon vessel. The BOEMRE is
expected to issue a subsequent report that will likely focus more heavily on the drilling aspects of the Incident and hence the
roles of BP, Halliburton and Cameron.

On 21 May 2010, President Obama signed an executive order establishing the National Commission on the BP Deepwater
Horizon Oil Spill and Offshore Drilling (National Commission) to examine and report on, within six months of the date of the
Commission’s first meeting, the relevant facts and circumstances concerning the causes of the Gulf of Mexico oil spill
incident and develop options for guarding against, and mitigating the impact of, oil spills associated with offshore drilling,
taking into consideration the environmental, public health, and economic effects of such options. On 11 January 2011, the
National Commission published its final report on the causes of the Incident and its recommendations for policy and
regulatory changes for offshore drilling. On 17 February 2011, the National Commission’s Chief Counsel published a separate
report on his investigation that provides additional information about the causes of the Incident. The National Commission
ceased operations on 11 March 2011.




                                                                                                                                 32
                                       Legal proceedings (continued)

On 7 July 2010, the US Chemical Safety and Hazard Investigation Board (CSB) informed BP of its intent to conduct an
investigation of the Incident. The investigation is focused on the 20 April 2010 explosions and fire, and not the resulting oil
spill or response efforts. The CSB is expected to issue within two years several investigation reports that will seek to identify
the alleged root cause(s) of the Incident, and recommend improvements to BP and industry practices and to regulatory
programmes to prevent recurrence and mitigate potential consequences. Also, at the request of the Department of the
Interior, the National Academy of Engineering/National Research Council established a Committee (Committee) to examine
the performance of the technologies and practices involved in the probable causes of the explosion, including the
performance of the blowout preventer and related technology features, and to identify and recommend available technology,
industry best practices, best available standards, and other measures in the US and around the world related to oil and gas
deepwater exploratory drilling and well completion to avoid future occurrence of such events. On 17 November 2010 the
Committee publicly released its interim report setting forth the Committee’s preliminary findings and observations on various
actions and decisions including well design, cementing operations, well monitoring, and well control actions. The interim
report also considers management, oversight, and regulation of offshore operations. We expect that the Committee will issue
its final report that presents the Committee's final analysis, including findings and/or recommendations, by 1 June 2011 (a
pre-publication version of report), with further review and a final published version to follow by 30 December 2011.

A second, unrelated National Academies’ Committee will be looking at the methodologies available for assessing spill impacts
on ecosystems in the Gulf of Mexico, and a summary of the known effects of the spill, the impacts in the context of stresses
from other human activities in the Gulf, and identification of research and monitoring needs to more fully understand the
effects of the spill and gauge progress towards recovery and restoration.

A third National Academies' Committee will be studying methods for assessing the effectiveness of safety and environmental
management systems (SEMS) established by offshore oil and gas operators. The Committee will be preparing an interim
report that will identify a range of assessment means and the pros and cons of each; we understand that the Committee
plans to issue the interim report in April 2011. We also understand that the Committee will issue a final report of
recommendations that will focus on assessing human and organizational factors, and that the Committee expects to
complete the final report of recommendations by 30 December 2011.

On 14 June 2010, the US Coast Guard initiated an Incident Specific Preparedness Review (ISPR) to examine the
implementation and effectiveness of the response and recovery operations relating to the spill. On 18 March 2011, the Coast
Guard ISPR team released its final report capturing lessons learned from the incident as well as making recommendations on
how to improve future oil spill response and recovery efforts.

On 10 March 2011, the Flow Rate Technical Group (FRTG), Department of the Interior, issued its final report titled
“Assessment of Flow Rate Estimates for the Deepwater Horizon/Macondo Well Oil Spill.” The report provides a summary of
the strengths and limitations of the different methods used by the US government to estimate the flow rate and a range of
estimates from 13,000 bpd to over 100,000 bpd. The report concludes that the most accurate estimate was 53,000 bpd just
prior to shut in, with an uncertainty on that value of ±10% based on FRTG collective experience and judgment, and, based on
modeling, the flow on day one of the Incident was 62,000 bpd. BP is currently reviewing the report.

Additionally, BP representatives have appeared before multiple committees of the US Congress that have been conducting
inquiries into the Incident. BP has provided documents and written information in response to requests by these committees
and will continue to do so.

On 1 June 2010, the US Department of Justice (DoJ) announced that it is conducting an investigation into the Incident
encompassing possible violations of US civil or criminal laws. The United States filed a civil complaint against BP E&P and
others on 15 December 2010. The complaint seeks a declaration of liability under OPA 90 and civil penalties under the Clean
Water Act. Paragraph 92 of the complaint sets forth a purported ‘reservation of rights’ on behalf of the United States to
amend the complaint or file additional complaints seeking various remedies under various laws and regulations, including but
not limited to eight specifically mentioned federal statutes. Paragraph 92 of the complaint likewise contains a similar
‘reservation of rights’ regarding the conduct of ‘administrative proceedings’ under ‘the Outer Continental Shelf Lands Act, 43
U.S.C. §§ 1301 et seq., and the Federal Oil and Gas Royalty Management Act, 30 U.S.C. §§ 1701 et seq.’ On 20 April 2011,
BP filed claims against Cameron, Halliburton, and Transocean in the DoJ action, seeking contribution for any assessments
against BP under OPA 90 based on those entities’ fault.

Citizens groups have also filed either lawsuits or notices of intent to file lawsuits seeking civil penalties and injunctive relief
under the Clean Water Act and other environmental statutes. The DoJ announced on 7 March 2011 that it created a unified
task force of federal agencies, led by the DoJ Criminal Division, to investigate the Gulf of Mexico incident. Other US federal
agencies may commence investigations relating to the Incident. The SEC and DoJ are investigating securities matters arising
in relation to the Incident.




                                                                                                                                 33
                                       Legal proceedings (continued)

The State of Alabama has filed a lawsuit seeking damages for alleged economic and environmental harms, including natural
resource damages, civil penalties under state law, declaratory and injunctive relief, and punitive damages as a result of the
Incident. The State of Louisiana has filed a lawsuit to declare various BP entities (as well as other entities) liable for removal
costs and damages, including natural resource damages under federal and state law, to recover civil penalties, attorney’s
fees, and response costs under state law, and to recover for alleged negligence, nuisance, trespass, fraudulent concealment
and negligent misrepresentation of material facts regarding safety procedures and BP’s (and other defendants’) ability to
manage the oil spill, unjust enrichment from economic and other damages to the State of Louisiana and its citizens, and
punitive damages. It is possible that the States of Mississippi, Florida, Texas or other states and/or local governments, such
as coastal municipalities also may initiate investigations and bring civil or criminal actions seeking damages, penalties and
fines for violating state or local statutes. The Louisiana Department of Environmental Quality has issued an administrative
order seeking injunctive relief and environmental civil penalties under state law, and several local governments in the State of
Louisiana have filed suits under state wildlife statutes seeking penalties for damage to wildlife as a result of the spill. On 10
December 2010, the Mississippi Department of Environmental Quality issued a Complaint and Notice of Violation alleging
violations of several State environmental statutes.

On 21 April 2011, BP entered a framework agreement with natural resource trustees for the United States and five Gulf coast
states, providing for up to $1 billion to be spent on early restoration projects to address natural resource injuries resulting from
the Gulf of Mexico oil spill. Funding for these projects will come from the $20-billion Deepwater Horizon Oil Spill Trust. BP will
work with the trustees of the Deepwater Horizon Oil Spill Trust to create a separate sub account to ensure that funds are
made available to pay for early restoration projects and other NRD claims. Each project that is selected for early restoration
pursuant to the framework agreement must be agreed to by BP and all natural resource trustees. Each project agreement will
identify the natural resource improvements that the parties expect to achieve with the project, and those improvements will
offset BP’s alleged liability for natural resource damages in settlement agreements or final court judgments. The parties seek
to begin early restoration under this agreement in 2011 and 2012

On 15 September 2010, three Mexican states bordering the Gulf of Mexico (Veracruz, Quintana Roo, and Tamaulipas) filed
lawsuits in federal court in Texas against several BP entities. These lawsuits allege that the Incident harmed their tourism,
fishing, and commercial shipping industries (resulting in, among other things, diminished tax revenue), damaged natural
resources and the environment, and caused the states to incur expenses in preparing a response to the Incident. On 5 April
2011, the State of Yucatan submitted a claim to the GCCF alleging potential damage to its natural resources and environment,
and seeking to recover the cost of assessing the alleged damage.

BP’s potential liabilities resulting from threatened, pending and potential future claims, lawsuits and enforcement actions
relating to the Incident, together with the potential cost of implementing remedies sought in the various proceedings, cannot
be fully estimated at this time but they have had and are expected to have a material adverse impact on the group’s business,
competitive position, cash flows, prospects, liquidity, shareholder returns and/or implementation of its strategic agenda,
particularly in the US. These potential liabilities may continue to have a material adverse effect on the group’s results and
financial condition. See Note 2 on pages 21 – 26 for information regarding the financial impact in 2011 of the Incident and see
the financial statements contained in BP’s Annual Report and Form 20-F 2010 for information regarding 2010.

Other legal proceedings
From 25 October 2007 to 23 October 2010, BP America Inc. (BP America) was subject to oversight by an independent
monitor, who had authority to investigate and report alleged violations of the US Commodity Exchange Act or US Commodity
Futures Trading Commission (CFTC) regulations and to recommend corrective action. The appointment of the independent
monitor was a condition of the deferred prosecution agreement (DPA) entered into with the DoJ on 25 October 2007 relating
to allegations that BP America manipulated the price of February 2004 TET physical propane and attempted to manipulate the
price of TET propane in April 2003 and the companion consent order with the CFTC, entered the same day, resolving all
criminal and civil enforcement matters pending at that time concerning propane trading by BP Products North America Inc.
(BP Products). The DPA required BP America’s and certain of its affiliates’ continued co-operation with the US government’s
investigation and prosecution of the trades in question, as well as other trading matters that may arise. The DPA had a term
of three years but could be extended by two additional one-year periods, and contemplated dismissal of all charges at the end
of the term following the DoJ’s determination that BP America has complied with the terms of the DPA. The initial three year
term has expired and the DoJ’s motion to dismiss the action underlying the DPA was granted on 31 January 2011.
Investigations into BP’s trading activities continue to be conducted from time to time. The US Federal Energy Regulatory
Commission (FERC) and the US Commodity Futures Trading Commission (CFTC) are currently investigating several BP
entities regarding trading in the next-day natural gas market at Houston Ship Channel during October and November 2008.
The FERC Office of Enforcement staff notified BP on 12 November 2010 of their preliminary conclusions relating to alleged
market manipulation in violation of 18 C.F.R. Sec. 1c.1. The FERC staff will determine whether to pursue the investigation, to
close the investigation, or to seek authority to pursue resolution by settlement. On 30 November 2010, CFTC Enforcement
staff also provided BP with a notice of intent to recommend charges based on the same conduct alleging that BP engaged in
attempted market manipulation in violation of Section 6(c), 6(d), and 9(a)(2) of the Commodity Exchange Act. BP submitted
responses to both notices on 23 December 2010 providing a detailed response that it did not engage in any inappropriate or
unlawful activity.




                                                                                                                                 34
                                      Legal proceedings (continued)

Private complaints, including class actions, were also filed against BP Products and affiliates alleging propane price
manipulation. The complaints contained allegations similar to those in the CFTC action as well as of violations of federal and
state antitrust and unfair competition laws and state consumer protection statutes and unjust enrichment. The complaints
sought actual and punitive damages and injunctive relief. Settlement in both groups of the class actions (the direct and
indirect purchasers) has received final court approval. Two independent lawsuits from class members who opted out of the
direct purchaser settlement have now been settled in principle.

On 23 March 2005, an explosion and fire occurred in the isomerization unit of BP Products’ Texas City refinery as the unit was
coming out of planned maintenance. Fifteen workers died in the incident and many others were injured. BP Products has
resolved all civil injury claims arising from the March 2005 incident.

In March 2007, the US Chemical Safety and Hazard Investigation Board (CSB) issued a report on the incident. The report
contained recommendations to the Texas City refinery and to the board of directors of BP. In May 2007, BP responded to the
CSB’s recommendations. BP and the CSB will continue to discuss BP’s responses with the objective of the CSB’s agreeing
to close out its recommendations.

On 25 October 2007, the DoJ announced that it had entered into a criminal plea agreement with BP Products related to the
March 2005 explosion and fire. On 4 February 2008, BP Products pleaded guilty, pursuant to the plea agreement, to one
felony violation of the risk management planning regulations promulgated under the US Clean Air Act (CAA) and on 12 March
2009, the court accepted the plea agreement. In connection with the plea agreement, BP Products paid a $50-million criminal
fine and was sentenced to three years’ probation which is set to expire on 12 March 2012. Compliance with a 2005 US
Occupational Safety and Health Administration (OSHA) settlement agreement (2005 Agreement) and a 2006 agreed order
entered into by BP Products with the Texas Commission on Environmental Quality (TCEQ) are conditions of probation.

The Texas Office of Attorney General, on behalf of TCEQ, has filed a petition against BP Products asserting certain air
emissions and reporting violations at the Texas City refinery from 2005 to 2010, including in relation to the March 2005
explosion and fire. BP is contesting the petition in a pending civil proceeding. In March 2010, TCEQ notified the DoJ of its
belief that certain of the alleged violations may violate the 25 October 2007 plea agreement.

On 9 August 2010, the Texas Attorney General filed a separate petition against BP Products asserting emissions violations
relating to a 6 April 2010 compressor fire and subsequent flaring event at the Texas City refinery’s ultracracker unit. This
emissions event is also the subject of a number of civil suits by many area workers and residents alleging personal injury and
property damages and seeking substantial damages.

In September 2009, BP Products filed a petition to clarify specific required actions and deadlines under the 2005 Agreement
with OSHA. That agreement resolved citations issued in connection with the March 2005 Texas City refinery explosion.
OSHA denied BP Products’ petition.

In October 2009 OSHA issued citations to the Texas City refinery seeking a total of $87.4 million in civil penalties for alleged
violations of the 2005 Agreement and alleged process safety management violations. BP Products contested these citations.
These matters were subsequently transferred for review to the Occupational Safety and Health (OSH) Review Commission.

A settlement agreement between BP Products and OSHA in August 2010 (2010 Agreement) resolved the petition filed by BP
Products in September 2009 and the alleged violations of the 2005 Agreement. BP Products has paid a penalty of $50.6
million in that matter and agreed to perform certain abatement actions. Compliance with the 2010 Agreement (which is set to
expire on 12 March 2012) is also a condition of probation due to the linkage between this 2010 Agreement and the 2005
Agreement.

On 6 May, 2010, certain persons qualifying under the US Crime Victims Rights Act as victims in relation to the Texas City plea
agreement requested that the federal court revoke BP Products’ probation based on alleged violations of the Court’s
conditions of probation. The alleged violations of probation relate to the alleged failure to comply with the 2005 Agreement.

The OSHA process safety management citations issued in October 2009 were not resolved by the August 2010 settlement
agreement. The proposed penalties in that matter are $30.7 million. The matter is currently before the OSH Review
Commission which has assigned an Administrative Law Judge for purposes of mediation. These citations do not allege
violations of the 2005 Agreement.

A shareholder derivative action was filed against several current and former BP officers and directors based on alleged
violations of the CAA and OSHA regulations at the Texas City refinery subsequent to the March 2005 explosion and fire. An
investigation by a special committee of BP’s board into the shareholder allegations has been completed and the committee
has recommended that the allegations do not warrant action by BP against the officers and directors. BP has filed a motion to
dismiss the shareholder derivative action.




                                                                                                                                 35
                                       Legal proceedings (continued)

On 29 November 2007, BP Exploration (Alaska) Inc. (BPXA) entered into a criminal plea agreement with the DoJ relating to
leaks of crude oil in March and August 2006. BPXA’s guilty plea, to a misdemeanour violation of the US Water Pollution
Control Act, included a term of three years’ probation. On 29 November, 2009 a spill of approximately 360 barrels of crude oil
and produced water was discovered beneath a line running from a well pad to the Lisburne Processing Center in Prudhoe
Bay, Alaska. On 17 November, 2010, the US Probation Officer filed a petition in federal district court to revoke BPXA’s
probation based on an allegation that the Lisburne event was a criminal violation of state or federal law. A hearing is
scheduled for the week of 5 September 2011. On 12 May 2008, a BP p.l.c. shareholder filed a consolidated complaint alleging
violations of federal securities law on behalf of a putative class of BP p.l.c. shareholders against BP p.l.c., BPXA, BP America,
and four officers of the companies, based on alleged misrepresentations concerning the integrity of the Prudhoe Bay pipeline
before its shutdown on 6 August 2006. On 8 February 2010, the Ninth Circuit Court of Appeals accepted BP’s appeal from a
decision of the lower court granting in part and denying in part BP’s motion to dismiss the lawsuit. Briefing is complete and
oral argument was held on 7 March 2011. We await the court's decision.

On 31 March 2009, the DoJ filed a complaint against BPXA seeking civil penalties and injunctive relief relating to the 2006 oil
releases. The complaint alleges that BPXA violated various federal environmental and pipeline safety statutes and associated
regulations in connection with the two releases and its maintenance and operation of North Slope pipelines. The State of
Alaska also filed a complaint on 31 March 2009 against BPXA seeking civil penalties and damages relating to these events.
The complaint alleges that the two releases and BPXA’s corrosion management practices violated various statutory,
contractual and common law duties to the State, resulting in penalty liability, damages for lost royalties and taxes, and liability
for punitive damages.

Approximately 200 lawsuits were filed in state and federal courts in Alaska seeking compensatory and punitive damages
arising out of the Exxon Valdez oil spill in Prince William Sound in March 1989. Most of those suits named Exxon (now
ExxonMobil), Alyeska Pipeline Service Company (Alyeska), which operates the oil terminal at Valdez, and the other oil
companies that own Alyeska. Alyeska initially responded to the spill until the response was taken over by Exxon. BP owns a
46.9% interest (reduced during 2001 from 50% by a sale of 3.1% to Phillips) in Alyeska through a subsidiary of BP America
Inc. and briefly indirectly owned a further 20% interest in Alyeska following BP’s combination with Atlantic Richfield Company
(Atlantic Richfield). Alyeska and its owners have settled all the claims against them under these lawsuits. Exxon has indicated
that it may file a claim for contribution against Alyeska for a portion of the costs and damages that it has incurred. If any
claims are asserted by Exxon that affect Alyeska and its owners, BP will defend the claims vigorously.

Since 1987, Atlantic Richfield, a subsidiary of BP, has been named as a co-defendant in numerous lawsuits brought in the US
alleging injury to persons and property caused by lead pigment in paint. The majority of the lawsuits have been abandoned or
dismissed against Atlantic Richfield. Atlantic Richfield is named in these lawsuits as alleged successor to International
Smelting and Refining and another company that manufactured lead pigment during the period 1920-1946. Plaintiffs include
individuals and governmental entities. Several of the lawsuits purport to be class actions. The lawsuits seek various remedies
including compensation to lead-poisoned children, cost to find and remove lead paint from buildings, medical monitoring and
screening programmes, public warning and education of lead hazards, reimbursement of government healthcare costs and
special education for lead-poisoned citizens and punitive damages. No lawsuit against Atlantic Richfield has been settled nor
has Atlantic Richfield been subject to a final adverse judgment in any proceeding. The amounts claimed and, if such suits
were successful, the costs of implementing the remedies sought in the various cases could be substantial. While it is not
possible to predict the outcome of these legal actions, Atlantic Richfield believes that it has valid defences. It intends to
defend such actions vigorously and believes that the incurrence of liability is remote. Consequently, BP believes that the
impact of these lawsuits on the group’s results, financial position or liquidity will not be material.

On 8 March 2010, OSHA issued citations to BP's Toledo refinery alleging violations of the Process Safety Management
Standard, with penalties of approximately $3 million. These citations resulted from an inspection conducted pursuant to
OSHA's Petroleum Refinery Process Safety Management National Emphasis Program. BP Products has contested the
citations, and the matter is currently before the OSH Review Commission which has assigned an Administrative Law Judge
to decide this proceeding.

BP is the operator and 56% interest owner of the Atlantis unit in production in the Gulf of Mexico. In April 2009, Kenneth
Abbott, as relator, filed a US False Claims Act lawsuit against BP, alleging that BP violated federal regulations, and made false
statements in connection with its compliance with those regulations, by failing to have necessary documentation for the
Atlantis subsea and other systems. That complaint was unsealed in May 2010 and served on BP in June 2010. In September
2010, Kenneth Abbott and Food & Water Watch filed an amended complaint in the False Claims Act lawsuit seeking an
injunction shutting down the Atlantis platform. The court denied BP's motion to dismiss the complaint in March 2011.
Separately, also in March 2011, BOEMRE issued its investigation report of the Abbott Atlantis allegations, which concluded
that Mr. Abbott’s allegations that Atlantis operations personnel lacked access to critical, engineer-approved drawings were
without merit and that his allegations about false submissions by BP to BOEMRE were unfounded.




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                                      Legal proceedings (continued)

BP Products’ US refineries are subject to a 2001 consent decree with the EPA that resolved alleged violations of the CAA,
and implementation of the decree’s requirements continues. A 2009 amendment to the decree resolves remaining alleged air
violations at the Texas City refinery through the payment of a $12-million civil fine, a $6-million supplemental environmental
project and enhanced CAA compliance measures estimated to cost approximately $150 million. The fine has been paid, and
BP Products is implementing the other provisions.

On 30 September 2010, the EPA and BP Products lodged a civil consent decree with the federal court in Houston. Following
a public comment period, the federal court approved the settlement on 30 December 2010. The decree resolves allegations
of civil violations of the risk management planning regulations promulgated under the CAA that are alleged to have occurred in
2004 and 2005 at the Texas City refinery. The agreement requires that BP Products pays a $15-million civil penalty and that
the Texas City refinery enhance reporting to the EPA regarding employee training, equipment inspection and incident
investigation.

Various environmental groups and the EPA have challenged certain aspects of the operating permit issued by the Indiana
Department of Environmental Management (IDEM) for upgrades to the Whiting refinery. In response to these challenges, the
IDEM has reviewed the permits and responded formally to the EPA. The EPA, either through the IDEM or directly, can cause
the permit to be modified, reissued, terminated or revoked. BP is in discussions with the EPA and the IDEM over these and
other CAA issues relating to the Whiting refinery.

BP is also in settlement negotiations with EPA to resolve alleged CAA violations at the Whiting, Toledo, Carson and Cherry
Point refineries.

On 14 January 2011 BP and Rosneft Oil Company (Rosneft) announced the intent to form a strategic global alliance. The
alliance contemplates the granting to BP of the exclusive opportunity until up to 31 December 2012 to negotiate final terms
with Rosneft for joint exploration of the three licence blocks, EPNZ-1, 2, 3, on the Russian Arctic continental shelf (the Arctic
Opportunity). A share swap agreement was entered into as part of the alliance, whereby BP has agreed to issue 988,694,683
ordinary shares to Rosneft and Rosneft has agreed to transfer 1,010,158,003 ordinary shares to BP (the Share Swap
Agreement). An application was brought in the English High Court on 1 February 2011 by Alfa Petroleum Holdings Limited
(Alfa) and OGIP Ventures Limited (OGIP) against BP International Limited (BPIL) and BP Russian Investments Limited (BPRIL)
alleging breach of the TNK-BP shareholders agreement (the Shareholders Agreement) on the part of BP and seeking an
interim injunction restraining BP from taking steps to conclude, implement or perform transactions with Rosneft relating to oil
and gas exploration, production, refining and marketing in Russia. Those transactions include the Arctic Opportunity and the
Share Swap Agreement. The court granted an interim order restraining BP from taking any further steps in relation to the
Rosneft transactions pending an expedited UNCITRAL arbitration procedure in accordance with the Shareholders Agreement
between Alfa, OGIP, BPIL and BPRIL.

The arbitration has commenced and the arbitral proceedings are continuing. Both the Share Swap Agreement and the Arctic
Opportunity remain subject to an interim injunction. On 24 March 2011, the arbitration panel issued its second partial award
and the interim injunction has been continued until further order. On 8 April 2011 the arbitral tribunal allowed BP and Rosneft
to discuss the extension of a 14 April 2011 deadline for satisfaction of the conditions precedent for completion of the Share
Swap Agreement. On 14 April 2011 BP announced that it had agreed with Rosneft to extend this deadline to 16 May 2011.
This means that the Share Swap Agreement is subject to a long-stop date for the satisfaction of conditions precedent of 16
May 2011, failing which the agreement will terminate. Further arbitration hearings to consider an application by BP to vary the
interim injunction to allow the Share Swap Agreement to complete are now scheduled for 5 and 6 May. BP continues to
explore a range of possible settlement alternatives with all relevant parties which may or may not lead to settlement and
which may or may not result in a transaction.

On 9 February 2011 Apache Canada Ltd (Apache) commenced an arbitration against BP Canada Energy. Apache alleges that
in the future various of the sites that it acquired from BP Canada Energy pursuant to the parties' July 2010 Purchase and Sale
Agreement will have to have work carried out to bring the sites into compliance with applicable Alberta environmental laws,
and Apache claims that the purchase price should be adjusted for its estimated possible costs. BP Canada Energy denies
such costs will arise or require any adjustment to the purchase price. The parties have appointed the arbitrator, and currently
the hearing on the merits is scheduled to commence during the second quarter of 2012.



                                                         Contacts

                                                 London                                    United States

Press Office                                     David Nicholas                            Scott Dean
                                                 +44 (0)20 7496 4708                       +1 630 821 3212



Investor Relations                               Fergus MacLeod                            Nick Wayth
http://www.bp.com/investors                      +44 (0)20 7496 4632                       +1 281 366 3123


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